Tuesday, November 5, 2024

Portintruan Distillery build halted by ISG fall – The Spirits Business

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Construction of Elixir Distillers’ Portintruan Distillery on Islay has stopped after the ISG construction company entered administration.

The ground for the Portintruan Distillery was broken in 2020

On 20 September 2024, ISG and its eight subsidiaries entered administration, ceasing to trade with immediate effect.

As a result, no further work has been undertaken on the firm’s existing UK contracts, including distillery builds and updates.

Elixir Distillers commented: “ISG Construction and Elixir Distillers Limited have worked closely together for a number of years on our Islay distillery build. During this time, we have built strong relationships with all the ISG staff and contractors, who have been working hard to deliver our project on the island.”

ISG Construction has been involved with building Elixir Distillers’ Portintruan Distillery on Islay since 2020.

Sukhinder Singh, co-founder of Elixir Distillers, said: “Our initial thoughts and concerns are for everyone directly affected by the collapse of ISG, especially those made redundant. It will now take some time to partner with the right company to pick up the reins, and until then, the building site will remain closed to contractors. Our own staff on the island are still working on all the other elements required for the future opening of the distillery.”

ISG administration

Timothy Vance, Alan Michael Hudson and Dan Edkins were appointed joint administrators of ISG and its subsidiaries. The appointments were made by the High Court of Justice in England and Wales following applications by the companies’ directors under the provisions of paragraph 12 of Schedule B1 of the Insolvency Act 1986.

Zoe Price, CEO of ISG, who was appointed to the role in February 2024, shared the news with employees in an email that included the following: “Some of you may have seen reports in the media that ISG has filed for administration here in the UK. With sadness, I can confirm that this is factually correct.

“The group’s trading and cash performance has been impacted by legacy issues relating to the large loss-making contracts secured between 2018 and 2020, primarily in the residential, logistics and distribution sectors, as well as some Data Centre projects.

“I want you to know there have been significant efforts made to secure a sale of the group over many months. While there has been speculation for some weeks now, I can confirm that it was not possible to conclude a sale, as the purchaser could not satisfy the funding needed to recapitalise the business. Cathexis also looked at refinancing the company in recent months but has been unable to execute. This has left us no option but to file for administration.”

ISG Construction released a statement:

“On 20 September 2024, Timothy Graham Vance, Alan Michael Hudson and Dan Edkins of EY-Parthenon’s Turnaround & Restructuring Strategy team were appointed as joint administrators to the following eight UK trading entities of ISG: ISG Central Services Limited, ISG Interior Services Group UK Limited, ISG Fit Out Limited, ISG Engineering Services Limited, ISG UK Retail Limited, ISG Retail Limited, ISG Construction Limited and ISG Jackson Limited (all in Administration) (together “the Companies”).

“ISG’s UK operations, which provided construction and related services across the UK, have ceased to trade with immediate effect.

“ISG’s UK business has experienced liquidity constraints in recent months. The directors explored a number of options to secure the future of the business, including a sale of all or part of the group and refinancing options.

“Despite significant efforts to secure a sale of the group over many months, a deal could not be completed. Whilst there has been misleading speculation surrounding the potential sale in the last few days, we wish to be clear to employees, suppliers, and customers that it was not possible to conclude a sale as the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent.

“Due to current market conditions, an alternative sale or additional funding could not be secured. As a result, the directors made an application to court to place certain UK trading entities of ISG in administration.
 
“Headquartered in London, ISG employs around 2,400 people across its UK businesses providing construction, fit-out and engineering services. As the business has ceased to trade, regrettably the majority of roles will be made redundant with immediate effect. Approximately 200 employees will initially be retained to assist the administrators in winding down the business.”

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