One of the worst-hit subcontractors to ISG, which collapsed in September, says its exposure has been mostly wiped out after replacement main contractors were selected on its key projects.
Mechanical and electrical building services firm Maintenance & Contracting Services (MCS) was named in an administrators’ report last year as being owed more than £10m by ISG Fit Out.
The £55m-turnover specialist was a strategic supply chain partner for the major contractor’s fit-out arm.
In a note released in its latest accounts, however, MCS says its exposure has been reduced to just £115,770. It adds: “At the time ISG entered into administration we were part way through three large commercial office fit-outs with ISG Fit Out in central London.
“These three projects made up the vast majority of exposure/debt that MCS had with ISG at the time of [its] administration.
“We are very pleased to say that at the time of writing all three of these projects have had a new main contractor appointed, and have [been] remobilised, with two of these projects already fully operational again with site management and labour back on site.”
The specialist said it had been re-engaged by the new main contractors on all three projects “to complete the works we were originally subcontracted to ISG to complete”.
The note praises the approach of the clients on the projects, which it does not name, for their “willingness and appetite” to “support and protect the supply chain”.
It adds: “As a result […] almost all of the debt that MCS had with ISG has already been recovered from these projects, and has either already been realised as monies received into the business, or we have a contractual commitment resulting in monies being received in the very near future.
“We made full provision for retentions, accounts receivable and losses associated with construction contracts with ISG.”
Construction News approached MCS to ask which projects the accounts refer to, but it declined to elaborate.
The accounts, which cover the 12 months to 31 March 2024, saw MCS post a turnover of £54.6m, up from £50.8m.
Its pre-tax profit fell from £3.7m to £2.9m.
Dozens of projects that were being carried out by the £2.2bn-turnover ISG remain stalled, although some have restarted.
Earlier this month, Morgan Sindall announced it had taken over the delivery of 17 Columbus Courtyard in Canary Wharf for clients Oaktree Capital Management and LS Estates, a job ISG was originally set to deliver.
It involves converting a former nine-storey office block into a science research and technology hub.
In November, Mace took over the delivery of a new neuroscience building for University College London.
Outside of the capital, Walter Lilly was recently named as a replacement for ISG on a 7,400 square metre scheme to build a new headquarters for pharmaceutical giant UCB in Windlesham, Surrey.
Last year, steel specialist Billington said its trade credit insurance helped protect it from a financial hit following ISG’s collapse.
