36 Econnect staff axed despite rescue package

Oct 4 2008 by Karen Dent, The Journal

HALF of the staff at renewable energy company Econnect have been made redundant after a buyer stepped in to rescue part of the business from administration.

The Hexham group, which specialises in wind turbine technology, employed 73 people across its four business – the Econnect Group, construction, ventures and consulting. The consulting and ventures wings have been bought for an undisclosed sum by Senergy, an Aberdeen-based energy services business. It has retained 37 staff, who have transferred to a newly-formed subsidiary of Senergy.

But all 36 employees who worked for the construction and group parts of Econnect have lost their jobs.

Senergy, which operates in the oil and gas industry as well as the renewables sector, bought the trade and assets of the consulting and ventures businesses, as well as the Econnect Group’s shareholdings in its overseas consulting offices in Ireland, Australia and New Zealand.

Ian Green, joint administrator with PricewaterhouseCoopers which handled the sale to Senergy, said: “We are delighted that a sale has been achieved that secures the future of the Consulting and Ventures businesses and preserves the employment of 37 people in the Hexham area.

“Unfortunately, a sale of the group and construction entities was not possible and 36 of the 73 employees were made redundant immediately following the appointment of administrators.” Econnect, which was set up in 1995, was forced into administration because of problems in its Construction business, mainly caused by contract cost overruns. Its failure led directly to the failure of the other parts of the business.

However, Senergy, which has an annual turnover of £60m and employs 280 people worldwide, is now planning to drive Econnect forward.

It said the purchase of the Northumberland firm would help it to expand further in the lucrative renewables sector.