ISG owner breaks silence on firm’s collapse

The Texan tycoon behind bankrupt prison builder ISG has broken his silence on the demise of the firm, as details emerge of a $1 billion debt his company owes Goldman Sachs.
William Harrison III, the construction company’s former chairman, has said he is “devastated” for the 2,200 people who have lost their jobs, in what some have dubbed as the biggest collapse in the industry since the fall of the outsourcer Carillion in 2018.
ISG, which also built schools in Wales and Manchester and had a turnover of £2.2 billion in 2022, called in administrators from EY nine days ago. It was owned by Cathexis Holdings, Harrison’s family office, whose portfolio also includes data centre developer Yondr and Irish engineering firm Jones Engineering, which employs 4,000 people.
“I am devastated for the thousands of people who have lost their jobs, the supply chain who have been impacted, and all of our clients and their critical services,” said Harrison.
ISG’s demise followed Cathexis being plunged into a liquidity crisis last year after Goldman did not extend further lines of credit and asked it to begin paying down debts of more than $1 billion, according to City sources.
Cathexis had built up a debt pile of more than $1 billion with Goldman Sachs which was secured against the other companies in its portfolio.
Goldman is understood to have been spooked by the high loan-to-value ratio of its lending to Cathexis ballooning a year ago. As a result, the Wall Street lender opened discussions over repayment of the loan either by a refinancing with another bank or sale of Cathexis assets, City sources said.
Cathexis opted to sell portfolio companies including ISG and Yondr. ISG lined up a sale earlier this summer only for the deal to collapse in a row over funding.
Cathexis also hired bankers from Citi to sell Yondr. An auction for the UK-headquartered data centre company is due to come to a head in the coming weeks.
Yondr said that last week’s events did not affect its current sales process, which it said was to “accelerate growth”. It said: “The company has been exploring ways to accelerate its growth through access to additional capital.”