Its expansion plans saw Pihl set up a base in the UK and pick up several projects including Aberdeen’s 3R school programme, the troubled Museum of Liverpool project and the seriously delayed £32m Cowes college job on the Isle of Wight.
Bosses at Pihl said the contractor had been caught out by recognising as income substantial claims against third parties and incurring unexpected costs for post-completion work on several projects.
A statement said: “The expansion took place without sufficient balance in the contract terms and without having sufficiently verified the credit quality of the foreign customers and sub-contractors, and without making sure that the qualities of the work processes and the risk management procedures were sufficient to support the increase in activity.
A new management team took over last year when Pihl’s financial woes were uncovered, the most serious coming from a major hydro power plant in Panama.
But announcing their decision to file for bankruptcy the Danish management said: “It turned out that there were Danish and foreign projects on which the write-downs and provisions made were insufficient, and thus the actual amount of write-downs required has proved to be greater than had been anticipated so far.
“Also, on one project, accelerated completion led to increased costs, which the customer would not pay, and the matter is now awaiting arbitration procedures.”
The firm’s statement added: ” Today the board of directors of E. Pihl & Søn A.S. had to make the painful decision to file for bankruptcy, after all attempts to find a financial solution to secure the continued operation of the company had proved to be in vain.”