Erinaceous Goes Into Administration

Staff at property services firm Erinaceous face an uncertain future after the company called in KPMG as administrators.The Croydonbased based has been struggling with debts after rapid growth, and is now likely to be broken up after giving up its survival fight.

The company's four larger subsidiariesL: residential management, property maintenance and two insurance divisions ,are outside the insolvency process and account for around half the group's 4,000 staff.But the fate of 2,000 employees at smaller companies within Erinaceous dealing with surveying and architectural work, remains less clear.

The company, listed on the stock market, has appointed KPMG as administrators after failing to develop a rescue package that would have pulled it out of recent difficulties that saw it post a pre-tax loss of £3.9m for the six months to 30 June 2007, with debts of more than £220m.

In a statement to the stock exchange, the company said: “Given the extent of the challenges facing the group and the current state of the capital markets it has not been possible for the group to reach an agreement with its lenders and other creditors and therefore the board has now concluded, with regret, that it is necessary for the company to file for administration.”