Rok and Roll

Tenders are constantly awarded to the bigger companies. The rationale being that they are somehow a safer bet, but with the collapse of Connaught and now Rok this may change. The premise that bigger is better in the tendering world must at last be coming to an end. SME are more flexible, quicker to adapt and actually care about the services they deliver. If the government is to achieve the much promised 25% of all public sector work to go to SME, then the collapse of Rok can only strenghthen that resolve. Tender writers have known it for a long time, now everyone knows it, small is beautiful!

The full financial fall-out of from the collapse of Rok can now be revealed  as administrator PwC finalises the winding-up of the failed contractor.

The company was turning over £600m a year and at one time was valued at more than £450m by the Stock Exchange.

But PwC has only been able to raise £7m from Mansell for the company’s assets as a host of interested contractors pulled-out of prospective deals once they saw the state of Rok’s books.

Trade contractors, suppliers and workers are the biggest losers. Here’s how the demise of Rok has hit the industry:

Subcontractors and Suppliers

The Enquirer understands that the trade debt could be as high as £200m.

Trade contractors owed money by Rok are unlikely to see a penny after PwC raised only £7m from buyers.

The firm’s latest accounts show £200m was outstanding to “trade and other payables.”

Workers

Just 381 jobs were saved by the Mansell deal as PwC let 3,200 Rok staff go. Site workers have complained about unpaid wages while staff were also unhappy about being made redundant by text messages or conference calls.

Shareholders

Rok was once a darling of the City as its share price climbed to 250p. At the time of its failure that price had fallen to 18.5p

All shareholders’ money has been wiped-out with major stockholders including:

Lloyds Banking Group – 9.9m shares

BT Pension Scheme – 4.9m shares

Standard Life Investments – 850,00 shares

Banks

Rok had £80m outstanding in bank loans according to its last accounts.

Directors

Former staff will find it difficult to sympathise with the management team which led them into disaster.

But the directors had a fortune tied-up in shares and options which are now worthless.

The figures below show the value of each directors’ share and options holding at the time of Rok’s peak share price of 250p

Garvis Snook, chief executive – £4.9m

Rob Olorenshaw, chief operating officer – £2.1m

Steve Carden, managing director (construction) – £890,000

Martin Donachie, managing director (maintenance and build) – £1m

Claire Hamon, chief information officer – £1.1m

Julian Turnbull, company secretary- £1.5m