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Jarvis to call in administrators | Jarvis to call in administrators |
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Rail maintenance company Jarvis has announced that it will go into administration after lenders refused to offer the company further credit. | Rail maintenance company Jarvis has announced that it will go into administration after lenders refused to offer the company further credit. |
The company has seen big reductions in its business since the beginning of the recession in 2008. | The company has seen big reductions in its business since the beginning of the recession in 2008. |
Jarvis said its creditors were now not prepared to offer it the money it needed to continue as a going concern. | Jarvis said its creditors were now not prepared to offer it the money it needed to continue as a going concern. |
The company said it had no option but to enter administration, and had asked for its shares to be suspended. | The company said it had no option but to enter administration, and had asked for its shares to be suspended. |
"[The company] has been impacted by economic conditions generally and, in particular, the very considerable reductions in rail and plant work volumes," Jarvis said in a statement. | "[The company] has been impacted by economic conditions generally and, in particular, the very considerable reductions in rail and plant work volumes," Jarvis said in a statement. |
"Trading conditions have been, and continue to be, difficult," York-based Jarvis said in a statement. | |
"Following negotiations with the company's secured lenders, it has today become clear that sufficient support will not be extended to the company to enable it to continue trading as a going concern. | "Following negotiations with the company's secured lenders, it has today become clear that sufficient support will not be extended to the company to enable it to continue trading as a going concern. |
"As a consequence, the directors now have no option but to take steps... to place the company, and certain of its subsidiaries, into administration." | "As a consequence, the directors now have no option but to take steps... to place the company, and certain of its subsidiaries, into administration." |
Spending cuts | |
The decision means that the jobs of more than 2,000 Jarvis employees are at risk. | |
Jarvis's businesses involve rail maintenance contracts and rail freight services. | |
Last year, the company's executive chairman, the former Conservative minister Steven Norris, complained that a reduction in spending by its main client Network Rail was hitting the company hard. | |
"It has been a painful process to absorb the impact of Network Rail's sudden reduction in workload," Mr Norris said. | |
Jarvis came close to collapse in 2004 after racking up huge debts on over-ambitious bids for Private Finance Initiative contracts. | |
In February, Jarvis said it expected to make losses of about £8m for this financial year, including £3m in restructuring costs. | In February, Jarvis said it expected to make losses of about £8m for this financial year, including £3m in restructuring costs. |