Engie to buy Forrest housing and energy arms

Aaron Morby 4 years ago
Share

French energy services giant Engie is set to buy the social housing refurbishment and energy operations of stricken North West contractor Forrest Group.

Bolton-based Forrest has been fighting for survival in recent weeks, and yesterday revealed refinancing talks with banks had failed.

Keith Reid, chief financial officer at Forrest, blamed caution about construction in the debt markets for the deadlock.

He said the firm was now progressing talks with a mystery buyer for Forrest’s profitable housing maintenance and energy operations.

The Enquirer understands Engie, which bought Keepmoat’s regeneration business two years ago, is about to seal a deal for the operations that represent just over two-thirds of last year’s £83m revenue.

A deal with Engie could save many of the 400-plus workforce jobs.

But questions remain about what will happen to the once expanding new build division, which raced to £26m revenue on the back of the North West boom in build to rent projects.

Forrest’s financial problems came to a head last week when work stopped at the building businesses major sites in Manchester and Liverpool.

Part of the group’s cashflow problems come from three major Manchester building jobs: Citu NQ City in the Northern Quarter and developer X1’s Plaza and Gateway schemes.

Forrest agreed its last financial restructuring in March 2017 after racking-up pre-tax losses of nearly £26m in two years.

X1 Gateway scheme in Salford Quays

Reid said: “Over the last few weeks our efforts have been focused on trying to secure a refinance deal and the various contingency plans for the business.

“It has been an extremely difficult period and, unfortunately, we have not been successful in securing new funds.

“The debt markets remain cautious of the construction sector and this combined with a level of cautiousness relating to the challenges the business faced prior to the March 2017 refinance, meant that it wasn’t possible to secure new debt finance.

“Our shareholders also attempted to find an equity solution, but all options would have required some new debt funding.”

Reid added: “We have also been going through a due diligence process with various parties interested in the energy and refurbishment side of the business, which has performed well over recent years.

“A number of offers have been received and we will be finalising agreements for the disposal of these divisions over the coming weeks. This transaction will be covered under TUPE and all staff working on those contracts which are successfully novated will transfer.

“I would like to extend my thanks to the entire Forrest team, our customers and suppliers for their continued patience in what has been an extremely challenging period. We are continuing to work with FRP Advisory throughout the process.”

Yesterday staff were paid as promised by directors last week.

A source told the Enquirer: “The construction business looks to be all but closed down and likely staff made redundant or laid off.

“Many sites have been locked or have been taken over by their owners , with some projects re-assigned to other contractors.

“Many staff have already left and joined other contractors already.”

Developer X1  is now understood to have taken over their sites and contractor Vermont has been employed to take over developer Elliot Group’s Aura 1000 bed student site in Liverpool.

In Manchester’s Northern Quarter, the 180-homes Tib St project, which Forrest has recently secured, has been handed back to developer Factory Estates.

Latest news

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
31 mins ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
2 hours ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
2 hours ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
4 hours ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
17 hours ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
3 hours ago

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
3 days ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
3 days ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
3 days ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
3 days ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
3 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
4 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
4 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
4 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
4 days ago

Mount Anvil to start 900-home North London estate rebuild

Planning approval paves way for Barnsbury Estate rebuild in Islington
4 days ago

Green light for major laboratory campus in Cambridge

Developer BioMed to tender first building on 600,000 sq ft lab complex in the New Year
4 days ago

Belfast firm signs the biggest work deal yet under Project Gigabit

Fibrus to hook-up rural Cumbria to lightning-fast broadband under £108m deal
4 days ago

McLaren wins Leeds logistics park contract

Work to start imminently on warehouse complex for Firethorn Trust
5 days ago

Work restarts on £683m waste power plant after site death

Construction suspended for a week of investigations following fatality
5 days ago

Demolition starts on £135m Wigan Galleries scheme

Contractor BCEGI starts work on project to redevelop Wigan town centre
5 days ago

Amey CEO to step down following private equity buyout

Amanda Fisher to leave once business is transferred to new owners
5 days ago

New body set up to vet plant operator card schemes

Contractor trades bodies unite to tackle competency concerns over plant operator skills cards
5 days ago

Kier leads switch to hybrid battery generators

Battery units work alongside smaller generators cutting run times by nearly 60%
5 days ago

Plans in for first Leeds co-living scheme

Watkin Jones submits plan to convert old Direct Line HQ into 230 studio flats
5 days ago

Demolition worker crushed by excavator

Court hears 20-year-old woman was left with "life changing injuries"
6 days ago

Government pays £700m for 50% stake in Sizewell C

New body, Great British Nuclear, will be set up to develop pipeline of nuclear projects
6 days ago

Costain wins Heathrow Airport asset renewal deal

Firm takes early contractor involvement role in Terminal 2 baggage handling upgrade
6 days ago

Worker killed on £683m waste power plant site

Fatal collision involving heavy goods vehicle on giant north London site
7 days ago

HS2 JV shifts four Wembley Stadiums of earth in record time

EKFB team digs and hauls 15 million cu m of muck in 20 months
6 days ago

Contractor services