ISG files for administration

Major contracting firm, ISG, has filed for administration, putting 2,400 jobs at risk and stalling projects across the North-west, and nationally.

Staff were instructed via email from the firm’s CEO on the evening of 19th September that sites and offices would be closed, with subcontractors also stood down, when news of the filing went to press; the business had anticipated sharing more detailed plans with its employees on Monday 23rd September.

EY are expected to handle the insolvency after the sale of ISG to a South African buyer, first revealed in July, fell through, resulting in six of the business’ UK subsidiaries filing notice to appoint administrators yesterday (19th September). The fallout should the business fail is anticipated to be the biggest shock to the construction sector since Carillion’s collapse in 2018. ISG is the UK’s sixth largest contractor based on turnover (£2.2 billion reported in its most recent filing), and has been owned by the US-based Cathexis Holding since 2016.

In an email to staff published by trade publication, Construction Enquirer, ISG CEO Zoe Price told employees that trading out loss-making contracts secured between 2018 and 2022 had significantly affected the group’s liquidity to the extent it can no longer continue trading, despite having returned this year to profitability. Negotiations towards a sale have been unable to recapitalise the businesses, while Cathexis Holdings have also been unable to secure refinancing. Sale of individual business units has also not been achievable in the required timeframe to keep ISG trading.

In Greater Manchester, a number of major public sector projects are expected to be affected by the crisis. ISG had been appointed to deliver a £29 million contract to rebuild five fire stations across the city-region. Construction had also topped out on a new £16 million SEN high school in North Manchester last week, that is due to open in September 2025.

Nationally, the firm has private sector contracts with the likes of Apple, Barclays and Google. Sky News is reporting that civil servants are drawing up contingency plans should the firm’s collapse affect ISG’s work on prison and police station contracts around the country.