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Forrest refinancing fails as break-up looms

Forrest is to dispose of large parts of its core business after the firm failed to secure a refinancing deal.

In a statement, the contractor’s chief financial officer Keith Reid said efforts to secure a refinancing plan had not been successful, and that offers had been made for the energy and refurbishment side of the business.

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Construction News revealed earlier this month that the contractor had voluntarily withdrawn from a £200m framework while it worked on the refinancing deal.

At the time, the firm was also forced to deny reports that it could be placed in administration.

A spokeswoman refused to comment today when asked by CN whether the failure to refinance could see the company now enter administration.

Forrest Group has spots on a number of council and housing association frameworks across the North-west.

The contractor is also working on several schemes in Manchester and Liverpool, including The Residence for Elliot Group in Salford and the X1 development, also in Salford.

Commenting on the break-up of the business, Mr Reid said: “A number of offers have been received and we will be finalising agreements for the disposal of these divisions over the coming weeks.

“This transaction will be covered under TUPE and all staff working on those contracts which are successfully novated will transfer.

“I would like to extend my thanks to the entire Forrest team, our customers and suppliers for their continued patience in what has been an extremely challenging period. We are continuing to work with FRP Advisory throughout the process.”

Readers' comments (1)

  • Full credit to the Forrest Directors for managing to collapse the same business twice in two years...

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