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Friday, 30 November 2012

MPG has gone into administration

Building.co.uk has reported that a £2m dispute between main contractor, Galliford Try, and subcontractor MPG who worked on the Athlete's village at the London Olympics has resulted in MPG being forced to work on a company voluntary arrangement to allow it to have some relief from its debts.  MPG owes £10.2m to creditors but it says that the dispute with Galliford has left them with a big hole in cashflow.

The disputes relate to delays on the final two plots of the village, which together are worth £80m and contained 423 units, according to construction data company Barbour ABI.

MPG - had last reported turnover of £46.3m in the year to 31 December 2011

However, it does look like there was a  company debt problem even without the issues with Galliford as the CVA is expected to offer "at least" 32p in the £1.  So in order to survive it is needing to write off in the region of £6m.

MPG’s creditors will vote on accepting the CVA proposal at a meeting on 4 December. If they reject it this could force MPG into administration.

Several firms have gone bust on the athletes’ village project, including contractor P Elliott and subcontractors United AG and Trent Concrete.

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