400 jobs under threat as Red Sky enters administration
The company which had its maintenance contracts cancelled by the Northern Ireland Housing Executive (NIHE) over concerns about work practices has gone into voluntary administration.
Red Sky carried out work on NIHE properties in the greater Belfast area and Newtownabbey since 2007. It is understood that the firm was being paid £7m annually for five contracts.
The company said the jobs of its 400 employees had been put at risk by the Housing Executive move, which followed an inquiry into the firm.
Last Thursday the NIHE said it could confirm that the inquiry had highlighted what it called “significant concerns about the company's performance, including overcharging”, but refused to give further details
Red Sky also provides property maintenance and contracting services to the other public and private sectors through offices in Northern Ireland, the Republic and Britain and has an office in the growing economy of India.
Other projects include Belfast City Council’s popular ‘wayfinder’ signage for visitors.
The company now says it is looking at legal options after the Executive severed its contracts last week in a hand-delivered letter, following investigations into allegations of poor workmanship and overcharging.
A source close to the company said the severance of contracts was “out of the blue” and that Red Sky understood it was “in the middle of a process” with the Executive.
But Sinn Fein councillors in Belfast said they had been raising concerns about the firm for more than four years.
A NIHE spokesman said its primary concern will be to provide ongoing services for tenants and that contingency measures are in place.
“It should, however, be noted that our contract with Red Sky Group is due to continue for a further three months within the notice period,” he said.
Red Sky has appointed accountancy firm BDO as administrators with full agreement and continuing support of the company’s bank.
A spokesman for Red Sky said that the “sudden and unexpected action” by the NIHE had left it with no choice.
“In our view this action is in the best interests of the company and the employees,” he said.
He said this was “very much regarded as a temporary measure for the company”, adding it was about giving it “breathing space” and that they hoped to keep the business going
“Employees across the Red Sky Group incorporating Bel Air Refrigeration Ltd, have been informed of this decision,” the spokesman added.
Michael Jennings, joint administrator from BDO, said that it would immediately engage with Red Sky employees, the bank, suppliers and customers, including the NIHE.