An ISG lighting subcontractor has gone under, with administrators blaming the collapse of the main contractor.
Seventynine Lighting appointed Mark Boughey and Rebecca Dacre of Forvis Mazars as joint administrators on 14 October.
A statement from Forvis Mazars on Friday (25 October) said that 30 staff would be made redundant and claimed that ISG’s failure left the subcontractor with around £2m in bad debt.
The loss of a major customer combined with the debt was “sadly insurmountable”, administrators wrote.
The only debt to Seventynine listed in a set of administrator reports released last weekend for seven of the eight ISG firms that entered administration last month showed that ISG Retail owed the firm £158,738.
Administrators identified more than £190m in losses across ISG’s supply chain in initial statutory analysis by the firm’s administrators Ernst & Young (EY).
ISG’s main subsidiary ISG Fit Out Ltd has yet to reveal its initial estimate of how much it owes suppliers, although administrators have warned that they are unlikely to recover any funds.
Seventynine, a Gloucestershire-based lighting design and installation subcontractor, was founded in 2006 and worked on retail and office fit-out projects, including for Monsoon, Selfridges, Regus and Bupa.
Boughey said: “Although Seventynine Lighting has historically been a profitable and successful business, its sudden insolvency is unfortunately not an uncommon occurrence in the construction industry.
“A major contractor going into administration materially impacts the supply chain of other subcontractors involved in its projects.”
Boughey added that subcontractors can help protect themselves against the “inherent financial risks of the construction sector” by diversifying their customer base, monitoring the credit ratings of key suppliers and using credit insurance.
