Sources in the market say surety providers are braced for a £100m hit compounding a few torrid years of losses from high-profile contractor collapses.
Surety providers are understood to have failed to claw back anything from the failure of Buckingham Group, ISG, Readie and Henry Construction, racking up hundreds of millions of losses.
One source told the Enquirer: “While Ardmore’s hit will be less than the £160m from the collapse of Henry Projects it will still spook the surety market. The cost of bonding is sure to rise again and availability could weaken.”
Yesterday joint administrators to Ardmore – BTG and Panos Eliades Callender & Co – announced a round of 275 staff cuts, leaving a skeleton staff of less than 20 to support the administration.
They also confirmed six companies have been placed in administration, including: Ardmore Construction Group, Ardmore Major Projects, Ardmore Fitout, Ardmore Regeneration and Landmark Facades and Ardmore Hotels & Commercial.
The joint administrators said trading had ceased across the businesses and immediate action had been taken to secure key staff to assist with the administration process.
Specialist quantity surveyors have also been engaged while BTG Eddisons has attended sites to assess security arrangements, safeguard company assets and review health and safety requirements.
The firm had 10 London jobs on the go with many clients already seeking to appoint replacement contractors.
The administration marks a dramatic fall for one of London’s largest privately- owned contractors, which had built a strong reputation in residential towers, hotels and mixed-use developments.
While the main contracting businesses have entered administration, directors have simultaneously sought a moratorium for Ardmore Group, which largely includes its property operations. This will allow this remaining business breathing space to continue trading while its future is assessed.
The move comes as Ardmore pursues an appeal against a recent High Court Building Liability Order judgment that left companies across the group jointly liable for remediation claims linked to historic residential developments.
Industry sources believe the potential liabilities could reach £300m.
Earlier this week, the Court of Appeal granted Ardmore permission to challenge the ruling and agreed to fast-track the case because of its wider significance to the industry as a whole.
Ardmore argues the appeal raises important issues for construction, including when Building Liability Orders can be made and how far liabilities arising from historic projects can extend across corporate groups.
