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Jarvis to call in administrators Jarvis to call in administrators
(20 minutes later)
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," 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.