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More than 250 jobs lost at North East engineering firm Owen Pugh as all but one arm of the company ceases trading

Owen Pugh Credit: ITV Tyne Tees

It has been confirmed that 257 people at North East construction firm Owen Pugh have been made redundant.

The announcement comes after administrators failed to find a buyer for the civil engineering arm of the company.

Owen Pugh has around 300 employees across 5 sites:

  • The company's HQ in Dudley
  • Cramlington
  • Blaydon
  • Stockton-on-Tees
  • Outskirts of Sunderland
Owen Pugh Credit: ITV Tyne Tees

Administrators Grant Thornton UK LLP were called in on Monday 9 October

Cash flow problems are being blamed for pushing the engineering firm into administration.

The company is currently involved in helping to build an ambitious road scheme involving a triple-decker roundabout at the Silverlink Junction in North Tyneside.

Work is underway on a triple-decker roundabout at the Silverlink Junction Credit: ITV Tyne Tees

The Highways Agency has confirmed that work there will not be affected.

In a statement the administrators say 30 jobs at the Owen Pugh Aggregates branch of the firm are safe for the time being while work continues to find a buyer for the branch of the company.

Owen Pugh Aggregates is the part of the company that operates Marsden Quarry near Sunderland.

All 30 employees at the Owen Pugh Aggregates site have been retained and are working with the Joint Administrators to help effect a going concern sale.

To date, we have received a significant amount of interest from potential purchasers."

– Administrators statement
Owen Pugh Credit: ITV Tyne Tees

The statement, however, goes on to confirm that the civil engineering arm of the group was no longer viable

Unfortunately, and despite our best efforts, the position regarding the other businesses making up the Group is less positive.

Upon our appointment it quickly become clear that the civil engineering contracting arm of the business was not viable and further trading could not be supported.

Furthermore, key customers highlighted that the insolvency of the Group had triggered contract termination clauses.

In turn, due to the inter-dependency within the Group on these large civil engineering contracts, there was a knock on effect on the viability of the plant hire and drain services businesses.

– Administrators statement

A further nine employees have been retained at the Group’s head office in the short term to assist the Joint Administrators.