A civil engineering company involved in the installation of a £46 million all-fibre broadband network in the Harrogate district has ceased trading with the loss of 165 jobs.
Leeds-based Makehappen Group Limited, which was working for CityFibre, the UK’s largest independent fibre infrastructure provider, appointed administrators Interpath Advisory last week.
The huge installation programme covering Harrogate, Knaresborough and latterly Ripon, was announced in 2020 and has been carried out on a street by street basis.
In response to the news, a spokesperson for CityFibre, said:
“We have been made aware that Makehappen Group has entered into administration.
“We would like to assure residents that work sites have been made safe, and we will remain in close conversation with our local authority stakeholders while we review our plans.”
Neil Morley and Howard Smith from Interpath Advisory were appointed joint administrators of Makehappen Group Limited on July 18.
A statement from Interpath Advisory said:
“In recent months, Makehappen experienced significant pressure on cashflow after a number of contracts were withdrawn by their customers.
“As a result, the company was unable to continue trading and service its liabilities as they fell due, so after considering their options, the directors sought the appointment of the administrators.
“The company ceased to trade shortly prior to the appointment of the administrators. With no prospect of trade resuming, it is with regret that the joint administrators have made all of the company’s 165 members of staff redundant.”
Meanwhile, Mr Morley, said:
“There continues to be a number of opportunities, but also challenges for businesses involved in the building of fibreoptic broadband infrastructure across the UK and unfortunately, Makehappen was the latest casualty of these challenges.
“As we commence an orderly wind-down of the business, our priority will be to provide support to all of Makehappen’s employees, including providing them with all of the information they require to make claims from the Redundancy Payments Office.”
Read more:
Ex-staff at failed Harrogate firm CNG set to receive £43,000
Former staff at CNG Group look set to receive £43,200 in claims against the failed Harrogate firm.
CNG, which employed about 145 staff, blamed spiralling wholesale gas and electricity prices for going out of business in 2021.
Administrators Interpath Advisory has published a progress report, which was uploaded on the Companies House website this week, for the period from September 2 last year to March 1.
It said staff — classed as ordinary preferential claimants — claimed £43,200 for arrears of wages up to a maximum of £800 a week, accrued holiday pay and pension benefits.
The report by joint administrators Timothy Bateson and Christopher Pole added:
“We anticipate that ordinary preferential creditors should receive a dividend of 100p in the £.”
Administrators paid £635 an hour
The report also revealed Interpath is being paid £635 an hour for handling the administration. It said:
“We have incurred time costs of £153,269. These represent 241 hours at an average rate of £635 per hour.”
Interpath’s final fee by the time administration is due to end on March 1 next year is expected to be £298,759.
Preferential creditors are expected to be paid in full, the report said, and “it is likely that the unsecured creditors will receive a dividend” although the amount is unknown.
The timing of payments is also unclear.
The report described the company’s primary assets as “inter-company debtor balances and investments in others groups”.
These are expected to generate “significant realisations” but the administrators added:
“The flow of funds between the CNG group of companies is complex and will depend on each company within the group resolving matters which are currently preventing distributions being made to the company.”
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- 45 former CNG staff in £210,000 tribunal win against Harrogate firm
- CNG building in Harrogate goes back on the market
- Administrators reveal state of Harrogate firm CNG Energy’s finances
Administrators reveal state of Harrogate firm CNG Energy’s finances
The state of CNG Energy’s finances has been revealed after its administrators published its first report into the company.
The Harrogate-based company, which had offices on Victoria Avenue, fell victim to spiralling wholesale gas and electricity prices and went out of business last year.
A report published by Interpath Advisory, the administrators appointed to take charge of the company, has revealed CNG owes £3.6 million to HMRC and other “secondary preferential creditors”.
Although the administration process is still in the early stages, the report says it expects to pay “a dividend” to those creditors.
The report says:
“Based on current estimates, we anticipate that secondary preferential creditors should receive a dividend.
“We have yet to determine the timing and quantum, but we will do so when we have completed the realisation of assets and the payment of associated costs.”
The company also owes more than £4 million to trade creditors and £6 million to consumer creditors.
London-based IT consultancy firm Gentrack UK Ltd is owed £450,759 and is among the highest creditors in the report.
Read more:
- In Depth: Why Harrogate success story CNG ended in collapse
- Harrogate energy firm CNG ceases trading
Meanwhile, the company has also made all but 21 employees redundant. CNG employed around 145 staff in Harrogate.
Staff still working are currently assisting with the transition of customers over to new suppliers.
Company was operating on ‘thin margins’
Administrators also found that the company had been experiencing financial difficulty for some time due to “significant cash flow pressures primarily caused by sharp price increases in wholesale gas prices and the general volatility in the energy market”.
The company was already operating on “thin margins” prior to the covid pandemic and had taken out a secured loan of £35 million from Glencore, a multi-national oil and gas firm.
However, the failure of a number of key customers and spiralling wholesale costs left the company unable to finance itself. The report says:
“In the absence of the financial and operational support of CNG Wholesale and other group entities, the company did not have the financial resources required to operate as a standalone business or bear the £35 million loan that was due to Glencore.
“As a result, the directors and Glencore began to explore ways to facilitate an orderly exit from the market.”
Harrogate energy company CNG became the victim of a global phenomenon this year when it ceased trading after 27 years.
Wholesale energy prices spiralled this year, and the impact was dramatic, with CNG one of more than 20 UK companies exiting the market.
Paul Stanley, chief executive of CNG, told the Stray Ferret the company failed because four of its main customers went out of business within two weeks, leaving it with unpaid bills.
Attempts to raise capital or sell the business were unsuccessful due to continued market volatility and high prices in the energy sector.
The company supplied about 15 to 20 retail energy companies through its wholesale business arm and also has around 50,000 business customers. About 150 jobs were lost.
CNG’s headquarters on Victoria Avenue
Swift collapse
Despite being regarded as a local success story for the majority of its 27 years, CNG’s collapse was swift and unforgiving.
Alarm bells began to ring on October 14 when Mr Stanley sent a letter to customers saying it was exiting the wholesale market. Two weeks later the company entered liquidation.
With Christmas approaching, it couldn’t have come at a worse time for staff.
A series of meetings were held between company bosses and worried employees, who had questions about redundancy pay.
Staff have been paid for November but were not expected to be offered a redundancy settlement until after Christmas through a government scheme.
A source told the Stray Ferret it was a “stressful time to have no income.”
Read more:
- In Depth: Why Harrogate success story CNG ended in collapse
- Harrogate energy firm CNG ceases trading
Administrators
CNG then entered the Supplier of Last Resort process operated by the government’s energy regulator Ofgem.
The SoLR procedure was established by Ofgem as a safety net to ensure that when a company stops supplying energy, affected customers are guaranteed continuity of supply through other companies.
However, businesses that were supplied gas by CNG were warned that their energy bills will be expected to rise.
Interpath Advisory has now been appointed as administrator, and around 30 staff are working to close the company.
CNG was also synonymous with Harrogate Town football club, becoming the first-ever sponsor of their Wetherby Road ground from 2008 until 2020 when it was rebranded the CNG Stadium.
The company was also well-known in Harrogate as a supporter of local charities and community projects.