More than three quarters of 3,800 staff have lost their jobs and potential buyers put off by Rok’s portfolio of patchy businesses.
Administrators at Rok have made a further 1,800 people redundant after buyers for the building and maintenance business melted away. After a flurry of initial interest in the group following its administration last Monday, administrators from PricewaterhouseCoopers have now had to make more than three quarters of the firm’s 3,800 staff redundant.
The only remaining saleable division is the English construction and social housing division, PwC said, which employs 500 people. Administrator
Rob Hunt said “two or three” parties were conducting due diligence on that business.
The Scottish construction business and the maintenance and improvements divisions are to be closed down after buyers took fright at Rok’s high cost base. Unlike many construction companies Rok directly employed much of its workforce, with the only remaining business being one where a lot of work is sub-contracted.
Hunt said that given the drop-off in work in September, buyers “couldn’t get comfortable with the levels of revenue.”
It became clear late last week that buyers were cooling on deals to buy the Devon-based building contractor. Early front-runner Mears said it was reassessing its options, while PwC conceded it was unlikely to sell the group as a single entity. Hopes that a deal would be signed at the end of last week, or over the weekend, were dashed.
Rob Hunt, the joint administrator, said: “It became clear in the last 24 hours that we were not going to be able to find a purchaser. Operations cannot continue and hence we have had to take steps to close both the maintenance and improvements division as well as the Scottish construction division. We have retained a small workforce to assist us in this process.”
Those made redundant are being paid up to and including yesterday, PwC said.
Bidders have indicated that they felt that Rok as a business was patchy and poorly integrated, one describing it as a “motley bag”. The lack of interest has been surprising given that more than 100 companies initially threw their hats into the ring.
Hunt said a deal for the remaining business needed to be done quickly. “If we don’t do anything by the end of the week there may not be anything left to be interested in.”
Industry sources confirmed social housing specialists Mears were still interested in the social housing contracts, while Kier remains theoretically in discussions, as does Leadbitter, a contractor strong in the South of England.