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A major UK firm with subsidiary in Abu Dhabi has gone into administration, blaming the effect of the global recession.
Archial Group, formerly SMC, was facing an ongoing battle with British Customs and Revenue about an unpaid tax bill and had seen revenues shrink to £33.9m in 2009 – a far cry from the £42.6m it achieved in 2008.
Archial Group’s subsidiary company, Sparch, has ongoing projects in both Bahrain and Abu Dhabi – including the under construction Rihan Heights and Bahrain Bay – but sources at the company say that they will be unaffected by their parent company’s predicament
A source at Sparch, who declined to be named, told Construction Week Online: “It’s a tricky situation but we’re not part of the administration process.
“Our projects, such as Rihan Heights in Abu Dhabi, will be unaffected.”
World Architecture news reported yesterday that PricewaterhouseCoopers, appointed joint administrators of Archial Group and subsidiaries, released a statement which said that Archial was suffering from financial problems.
“In response to changes in market conditions, Archial Group PLC had taken a number of steps to improve operations and to develop a sustainable and profitable business going forward,” the statement read.
“However, due to difficulties in meeting the group’s financial obligations, the directors have concluded that various companies in the Group, including Archial Architects Limited and Alsop Sparch Limited, should be placed into administration to protect the business and assets.”
Companies going into administration are Archial Group, Archial Holdings, Archial Architects, Archial Resources and Alsop Sparch. At the firm’s request, its shares were suspended last Friday at a value of 1.5p.
Reports suggest that rival firms Aukett Fitzroy Robinson, Capita Symonds, Atkins and Aedas are interested in taking up where Archial Group left off, taking advantage of PricewaterhouseCoopers’ desire to sell the company as a going concern in order ‘to achieve the maximum realisations for the creditors of the Group’.
