Owen Pugh civils folds as administrators fail to find buyer

Grant Prior 12 months ago
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Administrators have been forced to make 257 workers redundant at the civil engineering division of Owen Pugh after failing to find a buyer for the business.

Administrators from Grant Thornton took control of the North East contractor on Monday.

They had hoped to sell the business as a going concern.

But only 30 workers now remain at Owen Pugh Aggregates which administrators are still looking to sell.

Grant Thornton told ITV: “All 30 employees at the Owen Pugh Aggregates site have been retained and are working with the Joint Administrators to help effect a going concern sale.

“To date, we have received a significant amount of interest from potential purchasers.

“Unfortunately, and despite our best efforts, the position regarding the other businesses making up the Group is less positive.

“Upon our appointment it quickly become clear that the civil engineering contracting arm of the business was not viable and further trading could not be supported.

“Furthermore, key customers highlighted that the insolvency of the Group had triggered contract termination clauses.

“In turn, due to the inter-dependency within the Group on these large civil engineering contracts, there was a knock on effect on the viability of the plant hire and drain services businesses.”

Former Owen Pugh chairman John Dickson told The Chronicle: “We ran out of money and we ran out of luck. I’m desperately sorry for what’s happened. I’ve lost a lot of money and I’ve lost my home.

“I’ve gone through three years of absolute hell trying to keep the business going and I’ve done everything I possibly could to make things work but it’s not been enough.

“We’ve had the most extraordinary bad luck and this is a particularly tough industry at a particularly tough time.

“I have to say that some of the companies we’ve worked for have shown a complete lack of moral scruples. Some of the main contractors are often just bullies.

“In most industries you will put in an invoice for your work and expect to be paid for 95% of it; we were sometimes getting 10 or 15%.

“The law allows companies to do that and there’s no incentive to behave properly.

“We could go to adjudication, but it would cost us £50,000 before it even started and all we’d get back is the original sum. There’s no penalty for the bad behaviour.

“This doesn’t happen in other countries and it doesn’t happen in other industries. It’s a thing that happens in construction.”

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