A major construction firm behind multi-million-pound projects across the North East has entered administration with staff immediately let go.
Building firm Tolent officially called in administrators on Monday (February 13) following a weekend of uncertainty over the company’s future.
Staff were sent home early on Friday (February 10) with reports the firm’s head officers were shut down early. Subcontractors were also reported to have removed equipment and materials from sites.
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The Gateshead-based firm employed around 400 people and had offices in Stockton-on-Tees, Shotton Colliery and Leeds
On Monday 313 of the companies’ employees were made redundant with immediate effect.
The administration leaves millions of pounds worth of schemes across the region in the balance.
Some of the projects the firm has been working on includes the £85.5 Milburngate project in Durham and, the £41.4m Vaux housing development on the banks of the River Wear in Sunderland, and a £5.4m regeneration of Bedlington Town Centre in Northumberland.
However, the Milburngate site is very near to completion, and a spokesperson said "the sad news that Tolent has entered administration will not impact on the project".
The spokesperson added: "The joint venture developers will continue the final stages of phase one by engaging directly with sub-contractors and relevant Tolent staff to ensure a timely end to construction work.”
James Lumb, Managing Director at Interpath Advisory and Joint Administrator, said: “Tolent is one of the most well-known construction firms in the North East, having been involved in landmark projects including Riverside Sunderland, the Hadrian’s Tower residential scheme and the £85.5m Milburngate development in Durham.
“However, like many businesses across the UK’s building and construction sector, the Group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its suppLy chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.
“Following the tapering off of the Government’s COVID support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector. This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.
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“Additionally, after the annual Christmas shut-downs and a cold December, the months of January and February often bring with them a painful cash crunch. In a sector which typically operates on wafer-thin margins, this can often prove to be insurmountable, and unfortunately, so has been the case for Tolent.”
“Our priority in the coming days is to work with key stakeholders to assess options for each of the Companies, including options for ongoing contracts and live projects.
“We will also be providing support to those employees who have been impacted by redundancy, including providing them with the guidance and information they need to be able to make claims from the Redundancy Payments Office.”
The company reported a £4m loss in 2021 despite increasing its turnover to almost £200.
Tolent said the collapse of developer High Street Group, whom it carried out construction of the Hadrian’s Tower skyscraper development in Newcastle for, was partly to blame.
The firm has been working on the Milburngate project in Durham, which will bring a host of bars, hotels, office space and apartments to the city.
In 2021 it also carried out £9.1m worth of schemes for the NHS and an £8.5m scheme to refurbish student accommodation in Newcastle and Nottingham.
It comes just days after reports that Newcastle-based contractors Metnor Construction also filed a notice of intention to appoint administrators.
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