MELVILLE DUNDAS, one of Scotland’s largest privately-owned construction companies, has fallen into receivership putting more than 300 jobs at risk.
Yesterday Tom Burton and Colin Dempster, from Ernst & Young corporate restructuring department, were called in by the management team and are now working through the weekend to save the company.
The Glasgow firm, which two years ago completed the world-famous spa facility at Edinburgh’s Sheraton Grand Hotel, has fallen after a torrid three years in which it has struggled to collect payments for disputed jobs.
Burton told The Scotsman that he already had a number of parties interested in taking over the firm but at this stage could not disclose a price, nor reveal the extent of the debts.
"We have received a number of enquires on contracts and groups of contracts regarding the business and will spend the weekend working through them to achieve the best outcome for the company," he said.
Yesterday industry insiders speculated that a number of buyers, including Millers, Laing and Cruden would be interested.
One source said: "It has a very good name in Scotland, and I would not be surprised that whoever takes it on would keep the name. As well as contracts, if they have experienced tradesman that is also very attractive as they are like gold dust."
Melville Dundas’ latest accounts filed with companies house, covering the year to 31 December 2001, show a fall in turnover from 107 million to 77m.
In effect sales and profits were hit as a result of delays in collecting money in respect of disputed jobs. This contributed to a steep increase in its short-term loans and overdrafts, putting the company in breach of one of its lending covenants.
Founded in 1911 it was rescued from the collapsed Lilley group in 1993 by a management buy-out.