Building.co.uk has reported that a £2m dispute between main contractor, Galliford Try, and subcontractor MPG who worked on the Athlete's village at the London Olympics has resulted in MPG being forced to work on a company voluntary arrangement to allow it to have some relief from its debts. MPG owes £10.2m to creditors but it says that the dispute with Galliford has left them with a big hole in cashflow.
The disputes relate to delays on the final two plots of the village, which together are worth £80m and contained 423 units, according to construction data company Barbour ABI.
MPG - had last reported turnover of £46.3m in the year to 31 December 2011
However, it does look like there was a company debt problem even without the issues with Galliford as the CVA is expected to offer "at least" 32p in the £1. So in order to survive it is needing to write off in the region of £6m.
MPG’s creditors will vote on accepting the CVA proposal at a meeting on 4 December. If they reject it this could force MPG into administration.
Several firms have gone bust on the athletes’ village project, including contractor P Elliott and subcontractors United AG and Trent Concrete.