The High Court has issued instructions to close down Readie Construction’s employee ownership trust (EOT).
Logistics and warehouse contractor Readie Construction appointed administrators from insolvency manager Begbies Traynor in February.
Earlier today (17 April), Insolvency and Companies Court judge Catherine Burton issued a winding-up order against Readie Management Ltd (RML), the parent company of Readie Construction.
She also granted an order against Readie Trustee Ltd, which was set up as the EOT in 2022, buying 100 per cent of the ordinary shares in RML.
Nobody from the companies appeared in court to oppose the order.
Earlier this month, Readie Construction’s administrators reported that RML owed the contractor £4.78m from a historic loan with no fixed repayment date.
The report said that RML’s latest management accounts indicated that it has no assets other than its shareholding in the company and that it was “not yet known whether there will be any recovery of this debt for the company”.
Readie Construction began trading in 2008 and reached 55th position in the CN100 2023 table of top contractors after seeing its revenue rise 22 per cent to £421.1m in its final full year of trading.
However, the administrators’ report said that financial problems began during Covid, when margins fell “due to lower outputs and longer project durations”.
During the ensuing period of high inflation, exacerbated by the Ukraine war, the firm suffered from the number of short-term fixed price contracts it had signed.
The economic turbulence resulted in the collapse of Readie’s two largest mechanical and electrical subcontractors, according to the report.
It also cited the failure of two main contractors in autumn 2023 for reducing the availability of trade credit insurance and bond surety markets.
Readie directors made a failed attempt to obtain a rolling credit facility from banks and the firm’s inability to obtain credit made funding through bonds impossible.
At this point, clients withheld more than £2m from Readie Construction, while most subcontractors stopped attending its sites in the period running up to the appointment of administrators.
The demise of Readie Construction follows the collapse of fellow EOTs Buckingham Group in August 2023 and Michael J Lonsdale in October 2023.
