Erinaceous, the troubled surveyors-to-buildings management company, has appointed administrators after failing to reach an agreement with its lenders on debt over £250 million.

The company, which was worth over £400 million a year ago, warned investors last month that it was unlikely that its shares had any value and today blamed the current state of the capital markets for not securing re-financing.

KPMG, the administrator, said that it had agreed the sale of the company’s insurance division and that its residential management and property maintenance divisions remain outside of insolvency and continue to trade as normal.

Jim Tucker, a partner at KPMG Restructuring and joint administrator, said: “Erinaceous has grown rapidly through acquisition in recent years. Although the insurance division continues to perform well, and we expect to announce the completion of its sale within days, the rest of the Group has struggled to integrate its acquisitions and has been loss making."

He added that discussions were taking place with a number of parties interested in the rest of the company's businesses and that the administrators hoped to conclude negotiations shortly.

There was no initial indication of how many of the company's 4,000 employees will be affected.

The suspension of the Erinaceous' shares this morning follows a strategic review of the company's operations, which looked at the possibility of refinancing borrowings, a sale, and raising funds, however, none of these options proved viable.

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