Keltbray, JRL Group, Morrisroe or even a Chinese construction firm could be lined up as prospective buyer for the troubled specialist steel contractor, according to director of construction finance specialist DRS Bond Management Chris Davies.
The historic firm, founded in 1877, appointed Martyn Pullin, David Willis, and Iain Townsend of specialist business advisory firm FRP as Joint Administrators on Thursday morning. Staff had been informed of potential job losses on Wednesday and told to collect personal items from the head office on Yarn Road.
The firm, which has an 18-month order book, is currently owned by Saudi Arabian industrial conglomerate Al Rushaid Group. It could be wound down if a buyer isn’t found.
However according to Davies, Cleveland Bridge could have a number of interested suitors.
He said: “My heart tells me that Cleveland Bridge should be saved, my head says it may end up in administration.
“Keltbray, JRL Group or Morrisroe are all sitting on cash piles, they all want to make strategic inroads and possibly acquisitions. If one of those three didn’t consider buying Cleveland Bridge I don’t see a buyer at the top end of the construction sector.
“Reddington JRL [part of JRL Group] who are sitting on a pile of cash, they have a £50M revolving credit facility but are sitting on £95M. I don’t see Kier having the money to buy it, BAM may not be interested and it wouldn’t be on Balfour Beatty’s radar at all.
“You’re not going to get private equity investing on that scale. In all probability they [administrators] will run out of time.”
Cleveland Bridge has been known as one of the leading specialists in its field, working on major projects such as Wembley Stadium, the Queensferry Crossing, the Shard and also as one of the original co-designers of the famous Sydney Harbour Bridge.
He added: “Chinese companies are looking to enter into the UK market and the Chinese have always looked long-term. To the Chinese a 50-year plan is short term, and they may be interested in acquiring the expertise that Cleveland Bridge has to offer.”
Administrators blamed the pandemic and delays to major projects across the globe for the demise of Cleveland Bridge. It is understood that a contract in Sri Lanka to build 250 bridges in rural parts of the country, which it won in September 2019, had been one of the problem contracts which contributed to the firm’s filing for administration.
Keltbray, JRL Group and Morrisroe have been contacted for comment.