Dawnus, the contractor dubbed the ‘Welsh Carillion’, owed its suppliers over £40m when it collapsed in March, according to administrators.
Grant Thornton, the administrators handling the firm’s insolvency, reported trade creditors, including suppliers and subcontractors, were owed £40.4m, while former Dawnus employees were owed £5m.
Grant Thornton said: “It is highly unlikely there will be sufficient funds to enable a distribution to unsecured creditors.”
Dawnus first called in administrators in 2017 due to cash slow problems but the firm received a £7m injection jointly from HSBC and the Welsh Government in March 2018.
Worsening conditions meant Dawnus had sought a buyer in December. While 52 potential trade buyers and 23 distressed investors were approached, only one offer was made but it was subsequently withdrawn following due diligence and the company went into administration in March 2019.
Ken Skates, economy and transport minister for the Welsh Government, told assembly members in March £1.5m was outstanding on a £3.5m loan made to Dawnus by the government before the firm went into administration, but he was confident this would be repaid “in due course”.
In March, the Specialist Engineering Contractors’ Group Wales/Cymru described the situation as “not unlike a Welsh Carillion”. It said Dawnus had “become the lead contractor for many infrastructure and building projects in Wales, particularly in the public sector”.
Dawnus held a number of public contracts in Wales, including the £12m Kingsway redevelopment in Swansea.
In September 2018, Dawnus said it directly employed around 700 people across six regional offices and 44 construction sites.
Alistair Wardell, restructuring partner at Grant Thornton, said: “The Dawnus Group has struggled with a wide variety of challenges and despite significant efforts to turn the business around, unfortunately it has not been possible to rescue the group. As a consequence, the future cash flows meant that the business was not in a position to continue to operate, including completing existing work in progress.”