Grenfell Tower refurbishment subcontractor JS Wright & Co owed more than £13m to other businesses when it collapsed, administrators have revealed.
In an update filed with Companies House, administrators Ben Jones and Rajnesh Mittal from FRP Advisory said that trade creditors stood at £13.5m on 17 March.
But this estimated total was “likely to increase as invoices/claims [are] received”, according to the document.
The administrators noted that they did not expect to have any money available to pay these companies.
FRP said it anticipated that employees of the failed firm would receive 14 per cent of about £200,000 estimated as owed to them for arrears of pay and pension contributions.
HMRC was owed more than £250,000 in tax, National Insurance and Construction Industry Scheme payments, the administrators added, but was unlikely to see a penny.
Meanwhile, NatWest was owed more than £3.8m at the time of administration, some of which it has offset. The bank is not expected to receive any more money. Loan-note holders are expected to secure half of about £1.4m owed to them.
FRP said JS Wright & Co, which became an employee-owned trust in 2021, experienced “cashflow pressure due to delayed receipts on a major project and retention payments” as well as “margin erosion across several projects”.
The administrator added that the mechanical and electrical (M&E) specialist suffered from “inflationary cost pressures on existing fixed-price contracts” as well as interest rate hikes and customers delaying projects.
Extended payment terms were agreed with several suppliers but directors were unable to agree further extensions “without risking cessation of service/supply” said FRP.
Directors “ultimately concluded there were insufficient prospects of achieving longer term trading viability”, said the administrator, which was appointed on 10 February.
FRP said it had not been able to trade the business or achieve a going-concern sale so had “pursued a strategy of winding down the company’s operations in a controlled manner”.
The administrators said 143 members of staff were made redundant immediately when they came in.
The remaining four employees were retained until 28 February to help with the administration process.
JS Wright & Co was appointed by Grenfell’s main contractor Rydon to carry out M&E works during the refurbishment of the West London tower carried out in the years before the blaze that killed 72 people in 2017.
However, JS Wright & Co subcontracted the installation of the smoke extraction system to PSB UK Ltd, and the Grenfell Tower Inquiry did not reach a firm conclusion on the role of that system in the tragedy.
The inquiry did not level any criticism at JS Wright & Co or any of its employees.
The M&E specialist had an average of 160 staff and made a £510,000 pre-tax profit from revenue of £41.8m in its most recently reported financial year, which ended on 29 April 2023.
According to its website, the company was founded in Birmingham in 1890 by plumber John Shivlock Wright and was “at the forefront of tackling the city’s Victorian slums, bringing the benefits of clean air, pure water and affordable heating to homes, schools and factories”.
More recently, the group has delivered building services in major residential and commercial schemes. These included the 37-storey Nine Elms Point and the 31-storey Indescon tower in London, and phase one of the £700m Paradise Birmingham scheme.