Bolton-based contractor Forrest, which is working on high-profile projects in Manchester and Liverpool, has denied rumours it is close to appointing administrators but has confirmed it is exploring a refinancing deal.
Industry sources told Place North West the contractor was in difficulty following reports in the Bolton News that the company was looking to refinance following a number of problem jobs.
It is understood Forrest’s directors met with the company’s banks last Friday to try and thrash out a refinancing deal, with sources claiming the company “has been in trouble for the last week or two”, while there are also claims that subcontractors have refused to go to sites unless they are paid on a pro-forma basis.
The group, which employs more than 400 people, is currently on-site at projects including Peel’s Plaza 1821 at Liverpool Waters; Elliot Group’s The Residence in Salford; and Citu NQ for Fred Done vehicle Salboy in Manchester’s Northern Quarter.
The latter scheme is understood to be one of the historic problem jobs that has hit the company, with sources suggesting Domis, the contractor set up by ex-Forrest boss Lee McCarren, is primed to take over should Forrest have to step away. The project is around one-third through with the steel frame currently built out. Other projects in the pipeline that are yet to start on site may also be in doubt, with the contractor also reportedly struggling to agree a price on the No1 Old Trafford residential scheme, which was initially agreed under Forrest’s former management.
The group’s finance director Keith Reid told the Bolton News the company was not in administration despite “a lot of rumours in the market”, but said the group was looking to refinance due to “a number of challenges on a number of projects”.
“The company is in the process of trying to secure a refinance deal and if we are unsuccessful there are a number of other viable options that we are working on.”
Other projects the company is working on include the £100m Aura development, also for Elliot Group, and X1 The Gateway in Salford Quays, a £28m, 20-storey apartment scheme.
Last year, the company made 30 staff redundant in a restructuring move after unearthing a pre-tax loss of £26m, which it said was down to accounting “errors”.
The company had previously reported a pre-tax profit of £3.6m in 2015 but this was revised heavily downwards to a pre-tax loss of £19.2m. This was followed by a £6.8m loss for the year to 29 February 2016.
Following this, the Greater Manchester Combined Authority agreed to step in with a £2m finance package to keep the contractor afloat. The GMCA was a new lender to the group replacing the Royal Bank of Scotland. At the time, Palatine Private Equity remained as majority shareholder, alongside Lloyds Development Capital.
Mark Nicholson, Carillion’s former managing director of building for the North, Midlands, South West, and Scotland, took over as chief executive in September 2017, following the exit of McCarren.