The construction group, which has a turnover of about pounds 150m, has reduced its debt to Barclays by nearly pounds 30m over the past year. In spite of this, Barclays is understood to have been determined to reduce further its exposure to the recession-hit sector.
Tony Budge, Budge's chairman, said Barclays' exposure to the collapse was a secured loan of pounds 6.7m, compared with an unsecured loan of pounds 35m a year ago. Mr Budge said Charterhouse and Prudential, his firm's institutional shareholders, had been willing to offer further financial support.
He said Budge would have made a profit this year because of the pounds 12m it made on the sale of its open-cast coal-mining business. RJ Budge, run by his brother Richard, is not exposed to the collapse of the construction business.
Mr Budge said the decision to appoint receivers 'took us by surprise. It's a shame. We are not very happy with it.'
Coopers & Lybrand partners were appointed as receivers by County NatWest, which acted as agent for a three-bank syndicate that also included the Royal Bank of Scotland. Only the Budge group's parent company is affected and its operating subsidiaries are not in receivership. The receivers have yet to make redundancies among the group's 800 employees.
On top of the recession, Budge had to struggle with the burden of an unlet office block in London Docklands that was costing it pounds 6m a year. Budge owed pounds 15m on the building. Mr Budge said: 'Judgement has been coloured by the lack of commitment to the Jubilee Line and the decision of the Department of the Environment not to move to Docklands.'
Budge was also at the limit of a pounds 20m borrowing facility, but Mr Budge said the group's other mortgaged properties 'are essentially income-producing'.
The company has suffered cash- flow problems because of its unwillingness to take on contracts at unprofitable prices.
Less than two years ago, Budge received a pounds 20m injection from investors in what Charterhouse described as 'one of the UK's largest ever traditional development capital investments'. Charterhouse has written down its investment in Budge to about pounds 1.4m.
Mr Budge said he was working with the receivers and continuing to look for work for the company.
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