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Engie buys out housing association contract after collapse of Forrest

Engie has taken over a multi-million pound maintenance contract with Anchor Housing Association after the company that was carrying out the work fell into administration.

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Engie buys out housing association contract after collapse of Forrest #ukhousing

The Anchor deal is one of two contracts, worth a collective total of £15m per annum, bought by Engie following the collapse of contractor Forrest Group.

Last week Forrest, which employs 230 people, went into administration after it was hit by cashflow issues. The deals saw 64 staff transferred from Forrest to Engie.

The 10-year contract, which was valued at £350m when it was signed by Forrest in 2014, was the company’s largest contract ever.


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The deal saw Forrest become specialist older people’s housing provider Anchor’s sole contractor in delivering planned investment work across its 483 schemes in the North West and North East regions.

Engie also bought a renewable and PV maintenance contract Forrest was delivering for utilities giant United Utilities.

Both deals are still subject to formal transfer processes.

Anchor and another specialist housing provider Hanover completed a mega-merger to form a new 54,000-home organisation operating across 90% of local authorities.

Brian Golton head of planned investment at Anchor Hanover said: “This agreement is a continuation of a current contract which was signed with Forrest and has six more years to run.

"It currently covers planned maintenance works in Anchor’s properties.

"As a matter of course, we will be reviewing all contracts in light of the merger between Anchor and Hanover housing associations.”

In March 2017 Forrest went through a refinancing to address cash pressures caused by a series of loss-making refurbishment contracts.

Delays and operational issues on three of its sites, alongside incorrect pre-construction estimates on a number of new schemes, resulted in unsustainable cashflows for the firm and the appointment of administrator FRP Advisory.

Forrest’s joint administrator Anthony Collier said: “Despite the best efforts of the directors, the legacy issues facing the company have been unable to be resolved, resulting in an unsustainable financial situation.

“Unfortunately, it has not been possible to secure a sale for the construction and housing elements of the company, and we are working with all stakeholders to deal with the orderly wind-down of these divisions.”

 

 

Update: at 12.15pm on 18/12/2018

This story was updated to include a statement from Anchor Hanover.

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