Page 441 - The Case Lab Book

In 1960 the Shropshire-based Wrekin Construction Company Ltd was founded was
a large civil engineering company. By 2007 it had an annual turnover of in excess

of £100m. However, by 2007 it was struggling for survival after an expansion plan
went wrong. It had by 2007 incurred trading losses of £7.6m and in March of that
year it was acquired by the Tamar Group Ltd.

Wrekin Group and Wrekin Construction were acquired by the Tamar Group
owned by David Unwin. New board members introduced to Wrekin:

David Unwin (Sr.) (chairman)
David G Unwin (director) and
John Woodcock (joint managing director)

In March 2009 Wrekin Construction went into administration, with nearly 500 jobs
losses. It blamed Royal Bank of Scotland (RBS) for its predicament because the
bank would not extend credit to cover its cash-flow problems. RBS retorted that

Wrekin was unsustainable due to "creditor pressure". It owed more than £20m to
about 1,000 creditors, as well as another £20m to its pension fund. But Wrekin
claimed that it had £40m worth of orders up to the beginning of March 2009 to re-

vamp Huddersfield’s Town Centre. That it had an overdraft of £4.25m and was
overdrawn by £2.8m. The company said that:

"All Wrekin Construction needed to keep going in a very competitive
market was £2m to £3m".

Building workers' union Ucatt said a healthy company was failing because banks
would not lend.

"There is a particular problem with the banks bailed out by

government cash not passing it on to construction companies. This
must be the last example of this problem,"

said Alan Ritchie, general secretary of Ucatt.

Wrekin claimed it had signed two contracts worth a total of £50 million on the
day it had been taken into administration.