Tolent group is now in administration, 91 Tolent employees were kept by the administrators to “help them while they explore any potential of a sale of the firms and their assets,” while 313 Tolent employees were laid off, according to official confirmation of the announcement on Monday afternoon.
Tolent plc and five of its operating companies have appointed James Lumb and Howard Smith from Interpath Advisory as Joint Administrators
Tolent plc, Tolent Construction Limited, Tolent Homes Limited, Ravensworth Properties Limited, Tolent Living Limited, and Tolent Solutions Limited are the companies.
Additional locations for the Gateshead-based company include Leeds, Stockton-on-Tees, and Shotton Colliery.
More than 300 jobs lost as Gateshead firm Tolent goes into administration
Tolent “has faced substantial obstacles,” according to the administrators, including growing raw material costs, problems with the supply chain, a labour and material scarcity, and the failure of a number of developers, contractors, and supply chain partners.
The £85.5 million Milburngate development in Durham, one of Tolent’s key projects, turned out to be severely loss-making, which had a considerable effect on the companies’ working capital.
Tolent is one of the most well-known construction companies in the North East, having worked on iconic projects like Riverside Sunderland, the Hadrian’s Tower residential development, and the £85.5 million Milburngate development in Durham, according to James Lumb, Managing Director at Interpath Advisory and Joint Administrator and had no option but to place the business in administration.
“However, the Group has been facing significant headwinds, including spiralling costs, labour shortages, and also the loss of other companies within its supply chain, which regrettably led to one of its major contracts turning a loss. This is true for many businesses in the UK’s building and construction sector.
“Access to financing has become more difficult for many enterprises throughout the industry in the aftermath of the Government’s COVID support schemes being reduced and recent economic turbulence. As a result, many construction and building companies are discovering that they have less options to help them deal with any financial crisis.
Additionally, the months of January and February frequently coincide with a painful cash crisis after the yearly Christmas shutdowns and a chilly December. This can frequently prove to be insurmountable in an industry that normally operates on razor-thin margins, which is regrettably the situation for Tolent.
Priority is to work with key stakeholders in the coming days
“Our first goal in the next days is to collaborate with important stakeholders to evaluate possibilities for each of the Companies, including choices for active projects and contracts,” Lumb stated.
“We will also be offering assistance to those employees who have been affected by redundancy, including giving them the direction and knowledge they require to be able to submit claims to the Redundancy Payments Office,” the statement continued.
The current building work at the Milburngate is almost finished, according to a development spokesperson. The project will not be affected by the disappointing news that Tolent has entered administration.
In order to assure a timely completion of building work, “the joint venture developers will continue the latter steps of phase one by working directly with subcontractors and relevant Tolent staff.”
Read more: Staff and the administration process
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.