Housing maintenance firm the Kinetics Group has entered administration for the second time in a month with 550 job losses expected.
Partners at Begbies Traynor - Gary Lee, Dean Watson and Neil Mather - were today appointed joint administrators of the group, which includes SCP Renewable Energy Limited, Sureway Gas Ltd, Kinetics Midlands Ltd and Kinetics South Ltd.
The Kinetics Group originally went into administration on 9 June. That led to 270 job losses in the North West, but shares in Sureway Gas, Kinetics Midlands and Kinetics South were acquired by SCP Renewable Energy Ltd. The Kinetics brand was maintained and a reported 640 jobs saved.
The administrators then said that since the reorganisation, the group has suffered from confusion regarding the solvency of subsidiary companies, delays in payments from key customers and from suppliers’ refusal to continue trading with it after its credit insurance cover was removed.
The vast majority of the 550 staff, who work across five sites, have been made redundant, with a small skeleton staff kept on to finalise the affairs of the group companies.
Begbies Traynor offered some hope to employees, saying their team is working with customers to ensure contracts can be transferred to new service providers, which “may ultimately result in continued employment for employees where possible”.
Mr Lee said: “It is with regret that the group has failed so soon after the restructuring exercise was carried out.
“A range of factors have impacted upon the group’s cash position and uncertainty over the financial position of the group has meant many of its contracts with customers have been placed elsewhere, curtailing the group’s ability to trade on.”
He added: “We are now working with customers and management to ensure that contracts can be formally handed over to ensure that continuity is afforded wherever possible and to minimise disruption.”
Kinetics had provided building maintenance solutions to over 250,000 social housing properties, schools and public buildings across the UK but its remaining Kinetics subsidiaries had been concentrating on gas maintenance contracts.
Kinetics were providing gas maintenance to Haringey Council. The council said it became aware that Kinetics was “facing difficulties” last week.
Construction union UCATT had said that its negotiations had preserved the jobs of the majority of the 370 workers based in the North West. Housing association Liverpool Mutual Homes has agreed to take on 200 workers.
UCATT said it also saved a further 60 plus jobs in Preston, where the former Kinetics workers have undertaken a TUPE transfer to local company HT Forest. The union said it would be applying to the employment tribunal for a protective award for the remaining 100, due to Kinetics’ alleged failure to consult on the redundancies.