Jarvis calls in administrators
Engineering contractor Jarvis says it is calling in administrators following a plunge in rail and plant work. The move puts around 2,000 jobs under threat.
The York-based group, which has businesses in rail, plant, freight and facilities management, said it had suffered "very considerable reductions" in business since the recession struck, which had left it dependent on support from lenders and Network Rail.
"Following negotiations with the company's secured lenders, it has today become clear that sufficient support will not be extended to the company to enable it to continue trading as a going concern," said Jarvis.
The group - once the UK's biggest construction company - added that it was left with "no option" but to place the company in administration and has asked for shares to be suspended.
The news follows warnings of heavy losses from the group last month after it said it was being hit by spending delays at Network Rail.
Network Rail has cut its track-renewal programme by 30 per cent - a move which already led to a plunge in half-year revenues for Jarvis, to £114.7 million from £203.1 million a year earlier.
It said last month that the impact was expected to lead to a £5 million operating loss this year - but that a further £3 million in restructuring costs would likely mean an even deeper slide into the red.
Jarvis had been seeking to reduce its dependency on Network Rail for contracts and last month landed the £55 million Evergreen 3 deal from Chiltern Railways for renewal works to the line serving Oxfordshire and the Midlands.
But this was not enough to prevent its collapse into administration without the support of its lenders.