Heathrow Travelodge JV partner forced into voluntary liquidation

One half of the joint venture that built a pioneering modular hotel for Travelodge at Heathrow is putting itself into voluntary liquidation.

George & Harding Construction, which holds a share in modular builder Verbus Systems alongside Buro Happold, said it was in the process of making the move due to the financial problems of major customers and other debtors breaching its credit terms.

The 300-room hotel, built from shipping containers, was opened last week.

The company declined to reveal which customers and debtors had been responsible for its problems.

Verbus Systems is still expected to trade as normal. Levels of shareholding in the company are still being discussed.

The firm's chairman Colin Harding, who was a founding member of the Movement for Innovation (M4I) set up by former deputy prime minister, John Prescott, as well as being a regular columnist for Building magazine, said:

"We greatly regret the decision to place the company in voluntary liquidation. The next scheduled project was due to start in the first quarter of 2009.

"Unfortunately this project was abandoned two weeks ago because it was within the Heathrow third runway acquisition area. The company has also been the victim of a particularly sudden reverse in its major customers' fortunes and many other potential projects have been delayed."

Meanwhile, G&H Group, which continues to trade, indicated that it was entering into a consultation exercise with a view to making 19 people redundant. 

The group, the parent company for G&H Retail, G&H Joinery, G&H Contracts, G&H Design and G&H Construction, is separate from George and Harding Construction.

The firm, which has a £19m-a-year turnover, blamed "destructive competition from some firms bidding for work at zero or negative margins".

Chief executive Mark Allies said: "We have held off [making redundancies] for as long as possible, but now must restructure to reflect the current economic situation as many of our competitors already have done.e_SDRq