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Fri October 30 2020

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Rok suitors approach clients directly

10 Nov 10 Rivals of Rok are approaching the stricken contractor's clients directly about taking over its contracts, rather than go through administrators PwC.

This would allow the firms to take on the contracts before the administrators could sell the business.

A number of Rok’s competitors told the Financial Times they would prefer to take on the contractor's work directly, instead of dealing with PwC.

“Some of Rok’s customers cannot afford to have half-finished jobs with no one turning up to work, so we are getting our people in to take up where they left off,” the chief executive of one building group told the paper, adding that his firm already taken on some of Rok’s maintenance projects.

Some of Rok's clients confirmed that they had already transferred contracts to rival firms.

Tesco Underwriting, which only a fortnight ago awarded Rok the contract to carry out half of all of its building repair claims, said it had passed across work on new claims to other construction companies.

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Such a move would effectively allow Rok's competitors to snap up the firm's contracts for nothing, in sharp contrast to the situation following the demise of another housing contractor, Connaught, in September. Morgan Sindall, for example, paid £28m to take on the majority of its contracts.

Mears is the only firm so far to confirm it has had talks with PwC about taking over Rok's contracts.

Meanwhile, it has emerged that Rok's directors held talks with its banks last weekend in an attempt to secure emergency finance of around £20m, according to the Daily Telegraph. However, the proposals were rejected.

Rok is thought to have experienced a tightening of credit from suppliers and clients after issuing a profits earlier in the year.

Its banks, Royal Bank of Scotland, HSBC and Clydesdale, have been left with more than £60m of debt.  

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