The Erinaceous Group plc provide the homeless persons function directly for the City Council and provide housing management for it's partners including CityWest Homes and some of its Arms Length Management Organisation's (ALMO's). Erinaceous employ over 120 staff on Westminster local government contracts.
The City Council have admitted to Westminster UNISON that in anticipation of the Erinaceous Group failing they have in place contingencies to manage the situation.
Erinaceous hit trouble early last year. In the past 12 months their share price has fallen from nearly 400 pence per share to its current level of 3 pence. On other words the value of the company has dropped by 99%.
Erinaceous have informed shareholders that they will see the value of their holdings significantly diluted as the company pursues a debt-for-equity swap with their bankers to deal with the unsustainable level of debt.
In light of the uncertainty caused by Eranaceous's fall, Westminster UNISON has asked for immediate intervention by the City Council to take the contracts back in house and provide these important local government services directly.
Rahul Patel, Westminster UNISON's Branch Secretary said, "Erinaceous are in a similar situation to Northern Rock, except it is essential local government services that are at stake here. The City Council should take urgent steps and provide these services directly. If they don't then jobs and services are at risk."
"It is ironic that the City Council has championed privatisation on the basis that the private sector brings an expertise to running services that is lacked by local government. Running up unserviceable debts is a skill that Westminster City Council can well do without".
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