Six subsidiaries of contractor ISG Ltd have filed notices with the UK courts to enter administration. The subsidiaries affected are ISG Construction Limited, ISG Engineering Services Limited, ISG Retail Limited, ISG UK Retail Limited, ISG Jackson Limited, and ISG Central Services Limited.
The filings were submitted on Thursday, 19 September.
ISG Ltd, originally known as Interior Services Group, is the sixth largest contractor in the UK based on turnover. Despite the administration filings by its subsidiaries, ISG Fitout Ltd, another UK-based arm of the privately-owned firm, did not file for administration.
Recent reports indicate that ISG Ltd employs nearly 3,000 people and operates in the UK, Central Europe, Iberia, the Middle East and Singapore. The company's chief executive, Zoe Price, confirmed the administration in an email to employees, detailing the financial challenges the company has faced.
According to Price, ISG's trading and cash performance were severely impacted by legacy issues related to several large loss-making contracts secured between 2018 and 2020, particularly in the residential, logistics and distribution, and data centre sectors. Despite being profitable this year, the company struggled with liquidity issues stemming from these contracts.
Price's email also revealed that significant efforts were made to secure a sale of the group, but these efforts were unsuccessful due to the inability of potential buyers to provide the necessary funding. Attempts to refinance the company or sell individual business units also failed.
In her message, Price expressed regret and outlined the immediate next steps for employees, as sites and offices were pronouced closed.
The company, which de-listed from the London Stock Exchange in 2016 following its acquisition by US-based Cathexis Holding, has been unable to complete a sale or secure refinancing. The situation marks a significant turning point for ISG Ltd, which had previously been a major player in the UK construction industry.
