RMJM owners forced to bail out firm with £8m of their own money

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THE Morrison family is to plough £8 million of its own money into a bid to prop up its troubled architecture firm RMJM.

Chief executive Peter Morrison, whose father Sir Fraser Morrison is the controlling shareholder in the business, unveiled the refinancing deal to staff and shareholders yesterday - claiming that the company would be in "robust shape" to face the future.

But sources close to the firm have warned that the cash may not be enough to pay off RMJM's debts.

The company, which until recently employed former Royal Bank of Scotland chief executive Sir Fred Goodwin as a consultant, has struggled with cash flow over the past 18 months, leaving both employees and contractors around the world without payment.

It is believed that the funding is not the first cash injection to be paid into the business out of the Morrisons' own pockets in recent years.

Mr Morrison said the firm had structured the deal with the support of its banker, and is now awaiting shareholder approval. It is thought that an agreement is likely to be in place by the end of the month.

"We have been working through the detail of this funding plan for several months, to enable us to underpin our superb architectural talent worldwide with a robust financial position," said Mr Morrison.

"The economic downturn has meant a very difficult couple of years for the profession, but I'm immensely grateful to our teams and our partners worldwide for their patience and the exceptional quality of work they have continued to produce."

The funding package is made up of 5m which the Morrisons will inject into the company via a share issue, plus a 3m loan.

RMJM's accounts for the year to the end of April last year, which were due to be filed with Companies House in January, are now two months late.

The firm said the money would address its cash-flow issues - a result, it has claimed, both of the recession and late payments from clients.

A source close to the firm questioned whether 8m would be enough to solve the financial problems of the company, which generated a turnover of 122m in the year to April 2009.

"It is big money, but the question is: is it big enough?" asked the source.

"The company is in debt to everybody and everybody is dissatisfied. In four or five months, we will see whether this is likely to be enough."

The source added: "At least the Morrisons have finally understood that the company just cannot work without money."

News of the funding deal comes just days after it emerged there had been an exodus of senior management at the company's Hong Kong office amid a row over non-payment of salaries - while 33 other staff in the office's lucrative China team have been poached by rival firm Aedas.

Principal architect Catherine Siu was among those who walked out last week after firing off an e-mail tirade to Mr Morrison accusing him of leaving the Hong Kong operation unable to make payments to workers and local creditors. Ms Siu, who said she had made a formal complaint to the Hong Kong Labour Department, was accompanied in her walkout by other senior workers, including managing principal Bertil de Kleynen.

Just days earlier, Ed Jimenez, a senior architect at RMJM's New York office, also quit after sending a 900-word e-mail to Mr Morrison, claiming the chief executive's approach was "destined to failure".

But Mr Morrison yesterday claimed that RMJM's order book was back up to pre-recession levels following a string of contract wins including the Baha Mar Resort in the Bahamas, Motorworld and Yas Southern Marina in Abu Dhabi and the delivery of the Oman Convention and Exhibition Centre.

"Trading conditions continue to be challenging for the architecture sector but we are now seeing definite signs of recovery," added Mr Morrison. "The Far East continues to trade well and we are pursuing many significant new opportunities there."