Cleveland Bridge, the Darlington-based engineering company, owed £21 million to its creditors before it fell into receivership.
Reports found the business owed significant debts according to Companies House, and these included £6 million to the Arab National Bank, £3 million to HMRC, and £2 million to UK Export Finance. In addition, 4Syte, which provides invoice funding and had supplied the company with funding for £4 million, is still owed £2.24 million.
Cleveland Bridge is owned by ARPIC, a Saudi Arabian-based Oil and Gas conglomerate owned by Sheikh AI-Rushaid and his son, who bears the same name. The son is a director and is owed around £8 million.
Why did Cleveland Bridge fail?
It is understood that Cleveland Bridge failed because of delays to major projects caused by the pandemic and lower-paid work proved insufficient to keep the business afloat. Another large contract in Sri Lanka could not go ahead because of political unrest in the country. Further misfortune arose from an estimation error that eliminated the expected profit. A rise in steel prices was also bad news as these came after tenders for work had been agreed so could not be adjusted upwards.
Although efforts were made to turn the business around, these failed because of the scale of the debts and it was claimed, the inability to obtain a cash injection of some £12 million to ensure it could keep trading until the end of the year. The company is now expected to be liquidated with all 139 jobs lost.