The Board of nmcn plc has today announced that having taken advice, it has concluded that the company is no longer able to continue trading as a going concern.

The directors of the company and its subsidiary, nmcn Sustainable Solutions Ltd, have confirmed the decision to file notice of intention to appoint Grant Thornton UK LLP as administrators. The remaining companies in the Group are currently unaffected.

The company has been struggling for some time. In June 2021 the company and certain other members of the Group entered into conditional agreements to recapitalise nmcn by way of a £24 million fundraising with Svella plc and certain other investors, together with a renegotiation of its facilities with Lloyds Bank plc with up to a further £5.0 million proposed to be raised through an open offer to existing shareholders.

On 20 July nmcn subsequently issued a financing update saying it was continuing to work with its auditors to finalise the accounts for the year ended 31 December 2020.

Subject to completion of the audit, nmcn said the Group was expecting to report overall underlying losses before tax “significantly in excess” of the £24 million indicated in an earlier announcement of 28 May 2021.

Completion of the proposed fundraising transaction was conditional upon, inter alia, the publication of a prospectus and circular to seek the approval by shareholders of the resolutions to be proposed at a general meeting to provide the directors with the authorities to issue and allot new shares, and to dis-apply statutory pre-emption rights.

In order to publish the Prospectus and Circular to convene the general meeting the Company needed to finalise its annual report for the financial year ended 31 December 2020 and publish its audited financial statements for inclusion within the Prospectus and Circular.

A statement published the London Stock Exchange this afternoon said:

“ The Board, its advisers and Svella have worked tirelessly in the intervening period. However, as previously notified, completing the preparation of the Group's accounts has revealed further underlying contractual issues with expected losses rising to £43 million.

“It has now become apparent that the company will be unable to approve the audited financial statements in a timely manner to allow the Proposed Transaction to complete within the required timeframe. This in turn has led to significant liquidity issues for the Group and particularly the company, which unfortunately is now considered to no longer be able to continue trading as a going concern.”

“Indicative offers have been received from certain parties for the acquisition of certain of the trading operations and/or subsidiaries of the Company on a going concern basis, and discussions are ongoing with further parties which may lead to indicative offers on a similar basis.”

“Following discussions with its advisers, it is expected that this process will be conducted out of administration, to safeguard the continuity of operations and employment, and consequently the consideration receivable by the company is unlikely to result in any value for equity shareholders.”

“The Board of nmcn wishes to thank all of its shareholders, customers and suppliers for their support over the years and particularly Svella and those who had intended to participate in the equity subscription that formed part of the Proposed Transaction, which has had to be cancelled.”

One of the UK’s leading engineering and construction companies, nmcn delivers major built environment and water industry projects across the UK - from buildings and highways to large-scale water networks and treatment plants.

With a history dating back to 1946, nmcn has a 1,700-strong team, 12 UK offices and three off-site manufacturing facilities.

Further announcements will be made by the company as appropriate.