ISG files notice of administration
The companies that submitted their notifications late Thursday afternoon include: ISG Construction Limited, ISG Engineering Services Limited, ISG Retail Limited, ISG UK Retail Limited, ISG Jackson Limited, and ISG Central Services Limited.
The thriving ISG Fitout Limited, which reported a profit of £24 million and over £500 million in revenue in its latest accounts, has not been mentioned in the court filings.
On Thursday, a sense of turmoil swept through numerous locations as whispers circulated across the industry that ISG's financial troubles had reached a critical point.
Reports indicated that subcontractors were stopping work at various locations due to concerns about whether they would receive their payment.
It hasn't been officially announced who will take on the role of administrators for the business that has a turnover of £2.2 billion and employs roughly 3,000 people. However, there are speculations that Ernst & Young might be brought in to oversee the situation.
The request to assign administrators comes just a few days before employees were scheduled to get their monthly pay on Monday.
If the leading four main contractors go under, it will create a massive financial shockwave throughout the entire industry supply chain, with the M&E sector expected to feel the brunt of the impact the most.
Worries about ISG's financial issues started to surface at the beginning of the year, but the company was able to balance its payments to suppliers.
A subcontractor shared with the Enquirer, “Unlike many companies that challenge payment requests, they simply overlooked some payment cycles at the beginning.”
The unexpected exit of CEO Matt Blowers and finance director Karen Booth in February raised concerns once more.
However, subcontractors were assured that there would be a significant overhaul with the introduction of a new internal management team at the company owned by Texan billionaire William Harrison, through his Cathexis enterprise.
Only three months back, Cathexis attempted to dispel the speculation surrounding ISG's continued challenges. They revealed plans to finalize a deal with a buyer from South Africa, which was expected to bring in a £100 million investment aimed at restoring regular business operations.
Even after many months of promises that an agreement was about to happen, the takeover never actually took place.
