550 jobs lost as Kinetics collapse confirmed

Grant Prior 13 years ago

Accountant Begbies Traynor has let 550 staff go after being appointed as administrator for the housing maintenance specialist The Kinetics Group.

It is the second time the firm has gone bust in a month after it was “saved” in a pre-pack deal when administrators were first called in.

But Begbies Traynor partner Gary Lee said Kinetics ran into trouble again when housing clients pulled their contracts.

Begbies is administrator to four firms – SCP Renewable Energy Limited, Sureway Gas Limited, Kinetics Midlands Limited and Kinetics South Limited.

The group employs 550 staff over five sites but only a skeleton staff remains after the “vast majority” were made redundant.

The Kinetics Group provided building maintenance to over 250,000 social housing properties, schools and public buildings across the UK.

On June 9 the shares in Sureway Gas Limited, Kinetics Midlands Limited and Kinetics South Limited were acquired by SCP Renewable Energy Limited as part of a restructuring of the Kinetics Group.

Other Group companies had already failed, leaving these remaining divisions to concentrate on gas maintenance contracts.

Begbies said: “Since that reorganisation, the Group has suffered from confusion regarding the solvency of subsidiary companies, delays in payments from key customers and from suppliers’ refusal to continue trading with it after its credit insurance cover was removed.”

Lee said: “It is with regret that the Group has failed so soon after the restructuring exercise was carried out.

“A range of factors have impacted upon the Group’s cash position and uncertainty over the financial position of the Group has meant many of its contracts with customers have been placed elsewhere, curtailing the Group’s ability to trade on.

“We are now working with customers and management to ensure that contracts can be formally handed over to ensure that continuity is afforded wherever possible and to minimise disruption.”

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