Engie is in talks to buy Forrest’s energy and housing arms after the firm failed in its refinancing bid, Construction News understands.
CN has learned that a number of bidders, of which Engie is one, are currently in discussions with Forrest over the disposal of the two divisions, which form the bulk of the firm’s revenue.
According to its latest accounts for the year to March 2017, Forrest’s parent company Ensco 996 Ltd reported that the refurbish and respond division brought in revenue of £47.2m, representing 57.1 per cent of the business, with energy accounting for £9.6m, or 11.6 per cent.
Forrest’s financial woes have stemmed from its new-build division, with the firm admitting in recent weeks that it had made a series of “incorrect preconstruction estimates for schemes”.
Yesterday the contractor released a statement saying it had failed to secure refinancing and was exploring options for disposals.
Mr Reid said: “Over the last few weeks our efforts have been focused on trying to secure a refinance deal and the various contingency plans for the business.
“It has been an extremely difficult period and, unfortunately, we have not been successful in securing new funds.
“The debt markets remain cautious of the construction sector and this combined with a level of cautiousness relating to the challenges the business faced prior to the March 2017 refinance, meant that it wasn’t possible to secure new debt finance.
“Our shareholders also attempted to find an equity solution, but all options would have required some new debt funding.
“We have also been going through a due diligence process with various parties interested in the energy and refurbishment side of the business, which has performed well over recent years.”
Construction News revealed earlier this month that the contractor had voluntarily withdrawn from a £200m framework while it worked on the refinancing deal.
Forrest has also seen its contract to build the £350m Chatham Waters scheme in Kent (pictured) terminated by developer X1.
X1 Developments chief executive Nick Sweeney told CN: “Forrest were the original main contractor on this site. Their contract has terminated.
“X1 are in the process of appointing a replacement main contractor and the appointment process is at an advanced stage.
“X1 expects that the development will be completed in line with the original construction programme and any disruption caused by the replacement of Forrest will not ultimately delay delivery of the completed development.”
At the time, the firm was also forced to deny reports that it could be placed in administration.
Forrest and Engie have been contacted for comment.