The Enquirer understands talks began after JRL suffered significant losses totalling £83m in what chairman John Reddington described as the ‘most challenging two years’ in the firm’s 27-year history.

Under the terms of the proposed deal, which has still to be formally signed off by IJM Corporation, the £800m turnover Hertfordshire construction group will continue to trade under the JRL name with its various other brands including main contractor Midgard, concrete specialist J Reddington, McMullen Facades, Ark M&E and London Tower Crane Hire.

Both firms first worked together on a major London residential scheme, known as Royal Mint Gardens near the Tower of London, where the UK property arm IJM Land was developer.

Completed in 2019, the scheme comprises three blocks of up to 15 storeys, built over two active railway lines.

Since this job, IJM has been seeking to build its presence in London and the south east.

Earlier this year, IJM struck another joint venture deal with Network Rail Property paving the way to develop eight sites in London. Its Network Rail JV, known as Innova, aims to build 1,600 new homes, with a gross development value of more than £3bn.

IJM’s deal with JRL will now give the £1bn revenue Malaysian group in-house construction capability in the UK to deliver its ambitions.

The deal refinances JRL, strengthening its balance sheet and improving liquidity.

While JRL injected £50m into the business last year, cashflow has recently been impacted by big borrowing costs following the losses on legacy fixed-price contracts.

In the last few years, JRL’s Midgard main contracting business has grown strongly delivering 14% growth last year to account for over £600m of group turnover.

JRL is presently reporting a strong order book of £1.5bn and said that it had returned to profit in the first 6 months of this year with the senior management forecasting a 2024 year-end result around £20m profit from revenue of over £760m.