Jobs have been saved in the North East following the collapse of an energy efficiency services company following a contractual dispute which cost it £1.2m.
Cenergist had operations in Washington, as well as in Leeds, London, Cardiff and overseas in the Netherlands, Spain and India. It provided technology and consulting services, particularly to local authorities, and had employed 180 staff in the º£½ÇÊÓƵ.
But stalled projects, delayed payments and the impact of a £1.2m adjudication against the firm in a contractual dispute tipped it into administration. Insolvency experts at Interpath have now sold the company’s water division in a £325,000 deal to a group of its managers, supported by four directors of listed parent company Eneraqua.
The pre-pack deal saves 84 jobs, including 42 in Washington and others overseas. It sees managers Caroline Gray-Mason and Gary Copeland take control of the business via IFMD Limited, which was set up in May this year. The new owners have acquired about £800,000 of debtors for 85% of their value.
However, 100 jobs have been lost else in the business. Eneraqua said the water business made pre-tax profit of £975,000 in the year to the end of January, 2024, on revenue of £4.55m. It had net assets of £4.6m at the end of July last year.
Cenergist's demise comes despite the water division having secured a £7m contract, completed in January this year. But in recent months Cenergist faced delays on a number of large energy projects, as well as the impact of the dispute, which put strain on working capital.
Bosses had sought the help of Interpath to find a buyer having failed to raise the investment need to stay afloat. No viable solvent offers were received, leading to the pre-pack sale.
James Lumb, managing director at Interpath and joint administrator of Cenergist Limited, said: “Cenergist required significant investment following delays to certain major contracts and an adverse outcome from a contractual dispute. While a solvent sale was unfortunately not possible, we’re pleased to have secured a future for its water division, safeguarding a number of jobs, and we wish the team all the best with the venture as they look to rebuild.
"The issues faced by Cenergist are consistent with what we are seeing in the market across number of sectors; quality investment projects are being commissioned but timelines are slipping. So, while businesses are winning good work, cash flow is becoming stretched. Lenders and stakeholders are being very supportive and there are options out there but, in businesses like Cenergist that rely on a large turnover of projects, this can become unsustainable.
"Regrettably, not all of the group could be saved and so we’re focused on supporting impacted employees through this difficult period, including making representations to the Redundancy Payments Service, and winding down the rest of the group.
The sale to IFMD Limited includes various Cenergist ;subsidiaries including Control Flow Technologies Limited, Cenergist Energy Private Limited and Cenergist Spain SL and its subsidiaries HaGePe International BV and HGP Exploitatie BV.
