Mechanical and electrical engineering construction firm Norstead owed about £6.5m to creditors when it collapsed into administration, new documents show.
An administrators' report shows that the Killingworth-based operation owed sums to more than 300 suppliers and partners when insolvency experts at FRP were called in in early March, making 52 people redundant. The firm, which had operated across the country from its Newcastle and Maidenhead bases, was made insolvent by the failure of its sister company Metnor Construction and the pulling of funding by a major backer of the wider Metnor Group.
Discussions had taken place with Norstead's management team about a potential acquisition, and there had been interest from another North East-based buyer interested in expanding into the firm's market which included design, installation and mechanical and electrical services. Despite extensive talks with Norstead's customers about replacement contracts, a key funder of the potential management deal backed out and directors were forced to appoint administrators.
