Nearly 150 firms lose £60.5 million after collapse of Huthwaite giants nmcn
Nearly 150 companies are owed at least £100,000, with two owed more than £1 million, after the collapse of Huthwaite-based engineering and construction giants nmcn.
The true scale of the losses facing nmcn’s sub-contractors and suppliers has been laid bare in a report by the administrators, Grant Thornton.
What’s more, the thousands of unsecured creditors have been told they won’t be getting any of their money back. The report says: “We do not anticipate that a distribution will be made.”
A staggering total of 2,394 firms are listed as unsecured creditors. Their names take up 82 pages of Grant Thornton’s 153-page report.
In all, they are owed £60.5 million, with 145 businesses forced to shoulder crippling losses of £100,000 or more and two losing £1.6 million and £1.25 million respectively.
Among those facing six-figure wipeouts are civil engineering firms, water process specialists and tunnelling contractors.
Secured creditors are owed £18.1 million. These include the private investment organisation, Svella, and a lender called Reflex Bridging. Both are expected to be repaid in full.
The report also reveals that 1,642 jobs were saved at nmcn (formerly North Midland Construction), which had its headquarters in Huthwaite but operated nationwide via a number of regional centres, including one at Annesley.
But 99 staff, mostly from the company’s loss-making building business, were handed their P45s.
The rescued jobs are within the divisions of nmcn that the adminstrators saved thanks to deals with other businesses.
Svella picked up the telecoms division, Galliford Try acquired the water division for £1 million and Keltbray Highways took on parts of the infrastructure division.
Nmcn had a turnover of £405 million as recently as 2019, but hit financial problems during the Covid-19 pandemic.
Chief executive John Homer quit, and warnings were issued that the firm faced huge losses for last year.
Attempts at formulating a refinancing rescue package with turnaround specialists Svella failed, and nmcn formally went into administration on October 6, ending 75 years of trading.
It was the biggest corporate failure in the construction sector since Carillion went bust in January, 2018.
In another twist to the saga, it has emerged that an investigation into the auditing of nmcn’s 2019 accounts has been launched by the Financial Reporting Council.
The audit was carried out by accountant BDO, which says it will co-operate fully.