Nearly 10,000 jobs are at risk as the property and environmental services giant Connaught faces collapse.
The company, which specialises in social housing, is on the brink of going into administration, the BBC has learned.
In an announcement to the London Stock Exchange, Connaught said it had tried to secure funding for its £220m debts.
But funds were "not forthcoming", the group said. Trading in Connaught's shares has now been suspended.
"Connaught has had continuing discussions with its lenders and other sources of finance with the objective of securing additional funding and a restructuring of the group's financing for the longer term," the company said in a statement to the London Stock Exchange.
Spending cuts impact
"The group now believes that the availability of additional funds from its lenders will not be forthcoming and, whilst it remains in discussions with other parties, the ability to provide an adequate solution to the funding issues the group faces has become increasingly uncertain."
It said a further statement would be made "in due course".
Connaught provides a wide range of services including property management for the public sector, and affordable housing projects.
Continue reading the main story
“Start Quote
In spite of the severity of the economic crisis that engulfed the UK in 2008, few listed businesses have collapsed”
End Quote Robert Peston BBC business editor
It is also involved in waste management, cleaning and forestry services.
Connaught ran into serious difficulties over the past couple of months, after it emerged that a series of contracts would be loss making.
In June it warned that public spending cuts would see its revenues fall by £80m this year, and it warned it would make an overall loss this year.
Measures announced in the government's Budget would affect 31 of its social housing contracts, Connaught said.
With creditors reluctant to lend the company more money, Royal Bank of Scotland agreed to give the company a short-term loan of £15m in an attempt to keep it going.
But ongoing negotiations to secure longer term finanacing have now broken down, and Connaught's bank creditors have decided instead to put the business into administration, under UK insolvency procedures.
"In spite of the severity of the economic crisis that engulfed the UK in 2008, few listed businesses have collapsed," commented the BBC's business editor Robert Peston.
"In that sense Connaught, a FTSE 250 company which at one stage had a market value of well over £500m, is unusual."
Shares in the Exeter-based company have lost about 90% of their value since late June.
http://www.bbc.co.uk/news/business-11209317
And yet there was this quite recently (shares lost 90% value in June):
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| Quote: MARKET REPORT: Connaught posts healthy figures By Rob Davies Last updated at 12:35 AM on 28th April 2010 | |
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Read more: http://www.dailymail.co.uk/money/articl ... z0yraDNjXv
Don't take this as gospel, but IIRC they were also fond of making contributions to political parties, so we'll see if that seems to do them any favours...
