Hundreds of people have lost their jobs after one of the region's biggest construction firms went into administration.
Tolent, which is responsible for some of the most high profile buildings in the North East, including Hadrians Tower in Newcastle and Riverside in Sunderland announced it had gone into administration on Monday 13 February due to "significant challenges including the rising costs".
More than 300 of the company's 400 employees have been made redundant.
James Lumb and Howard Smith from Interpath Advisory were appointed joint sdministrators to Tolent plc and five of its operating subsidiaries.
Mr Lumb said: “Like many businesses across the UK’s building and construction sector, the Group has been battling severe headwinds, including spiralling costs, labour shortages and also the loss of other companies within its supply chain, all of which unfortunately resulted in one of its major contracts becoming loss-making.
“Following the tapering off of the Government’s Covid support schemes, and in the wake of recent economic volatility, access to finance has tightened for many companies across the sector.
"This means many building and construction firms are finding they have fewer options available to them to help deal with any liquidity crisis.
“Additionally, after the annual Christmas shut-downs and a cold December, the months of January and February often bring with them a painful cash crunch.
"In a sector which typically operates on wafer-thin margins, this can often prove to be insurmountable, and unfortunately, so has been the case for Tolent.”
The company, which has its headquarters in Gateshead and also has offices in Leeds, Stockton-on-Tees and Shotton Colliery, said one of its major contracts – the £85.5m Milburngate development in Durham – became significantly loss-making, which had a profound impact on the companies’ working capital.
The joint administrators made 313 of the companies’ employees redundant immediately following their appointment.
A total of 91 members of staff have been retained by the joint administrators to assist them whilst they explore any possibility of a sale of the businesses and their assets.
Mr Lumb added: “Our priority in the coming days is to work with key stakeholders to assess options for each of the Companies, including options for ongoing contracts and live projects.
“We will also be providing support to those employees who have been impacted by redundancy, including providing them with the guidance and information they need to be able to make claims from the Redundancy Payments Office.”
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