The news was officially confirmed on Monday afternoon as 313 Tolent staff were made redundant while 91 staff were retained by the administrators to “assist them whilst they explore any possibility of a sale of the businesses and their assets.”
James Lumb and Howard Smith from Interpath Advisory have been appointed Joint Administrators to Tolent plc and five of its operating subsidiaries.
The firms are Tolent plc, Tolent Construction Limited, Tolent Homes Limited, Ravensworth Properties Limited, Tolent Living Limited and Tolent Solutions Limited.
The Gateshead based group also has offices in Leeds, Stockton-on-Tees and Shotton Colliery.
The administrators said Tolent has “faced significant challenges including the rising costs of raw materials, supply chain issues, material and labour shortages, and the collapse of a number of developers, contractors and supply chain partners.”
One of Tolent’s major contracts – the £85.5m Milburngate development in Durham – became significantly loss-making, which had a profound impact on the companies’ working capital.
James Lumb, Managing Director at Interpath Advisory and Joint Adminisrator, said: “Tolent is one of the most well-known construction firms in the North East, having been involved in landmark projects including Riverside Sunderland, the Hadrian’s Tower residential scheme and the £85.5m Milburngate development in Durham.
“However, like many businesses across the UK’s building and construction sector, the Group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its suppy chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.
“Following the tapering off of the Government’s COVID support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector. This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.
“Additionally, after the annual Christmas shut-downs and a cold December, the months of January and February often bring with them a painful cash crunch. In a sector which typically operates on wafer-thin margins, this can often prove to be insurmountable, and unfortunately, so has been the case for Tolent.”
Lumb continued, “Our priority in the coming days is to work with key stakeholders to assess options for each of the Companies, including options for ongoing contracts and live projects.
“We will also be providing support to those employees who have been impacted by redundancy, including providing them with the guidance and information they need to be able to make claims from the Redundancy Payments Office.”
A spokesperson for the Milburngate development said: “The current building work at the Milburngate is very near to completion. The sad news that Tolent has entered administration will not impact on the project.
“The joint venture developers will continue the final stages of phase one by engaging directly with subcontractors and relevant Tolent staff to ensure a timely end to construction work.”
.gif)
