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Erinaceous Group PLC is the parent company of the Erinaceous Group.

A number of the group’s operations remain outside of any insolvency proceedings and continue to trade as normal.

The strongly performing insurance subsidiary, Erinaceous Insurance Services, is ring fenced from the rest of the group, and continues to operate as normal.

Jim Tucker and Myles Halley of KPMG, joint administrators, have agreed to sell Erinaceous Insurance Services to a vehicle owned by Erinaceous’ banks.

This is subject only to the consent of the Financial Services Authority and the Maltese FSA, who have been kept informed of developments.

The Residential Management division (Residential Management Group Limited and its subsidiaries) and Property Maintenance division (Erinaceous Property Maintenance Limited) also remain outside of any insolvency process and continue to trade as normal.

Erinaceous Group (LSE:ERG) employs around 4,000 people across 200 different locations nationwide, but had debts exceeding £250m.

In recent months the board, supported by its advisors, has undertaken a full strategic review of the group's operations.

The review covered the possibility of refinancing the group’s borrowings, options for sale and an equity raising.

Given the extent of the challenges facing the group and the current state of the capital markets, none of these options ultimately proved viable.

Tucker, a partner at KPMG Restructuring and joint administrator, said that Erinaceous had grown rapidly through acquisition in recent years.

Although the insurance division continues to perform well - and he added that he expects to announce the completion of its sale within days - the rest of the group had struggled to integrate its acquisitions and had been loss making.

Discussions are taking place with a number of parties interested in these businesses.

“The administrators hope to conclude these negotiations shortly but it is too early to tell how many employees will be affected. We will be working hard to ensure that all employees are kept up to date with developments,” Tucker concluded.

The administrators and the directors are currently in discussions with the Civil Aviation Authority about the management of Shoreham Airport in Sussex and Fairoaks Airport in Surrey.

Richard Hill of KPMG LLP has been appointed administrator of Erinaceous Managed Services Limited, part of Erinaceous Group Plc . Erinaceous Managed Services Limited owns the business and assets of Shoreham Airport, in Sussex.

As a consequence of the administration, Shoreham Airport is currently non-operational, however, the administrators are currently in an advance stage in negotiations with intersted parties to sell the business and assets of the airport and preserve jobs.

Around 30 businesses operate from the airport site, including Sky South airline, flight training schools, small private jets and some commercial transport.

Hill, confirmed that discussions were taking place with a number of parties interested in this business and vowed to ensure that all employees are kept up to date with developments."

As of 14 April 2008 the shares in Erinaceous Group PLC have been suspended from the London Stock Exchange.

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Related links

• Erinaceous Group PLC
• KPMG