BridgingDevelopment FinanceNews

Lendy’s administrators outline insolvencies in loan book

Lendy’s administrators have outlined the insolvencies in the loan book – which consists of 54 live loans.

Some 35 of these 54 loans have had either administrators appointed over the company or receivers have been appointed over the property.

Of the 54 loans, 29 are property bridging loans with a book value of around £36m and 25 are development finance loans with a book value of about £116m.

In May, by order of the court Phillip Sykes, Damian Webb and Mark Wilson, all of RSM Restructuring LLP, were appointed joint administrators of Lendy Limited, Saving Stream Security Holdings Limited and Lendy Provision Reserve Limited.

Bridging

The 29 live property bridging loans are secured against assets valued historically at £81m. However, current reported values are significantly lower.

The assets range in class and geography, though £10m of the £36m is secured against Scottish assets.

The report read: “Some of the schemes were dependent on subsequent securing of development finance and planning permissions.

“The inability to secure new finance to refinance the Lendy loan or secure appropriate planning consents appears to have undermined the rationale behind some of these loans.”

Some 22 of the 29 loans have formal insolvency proceedings against them, with either receivers or administrators being appointed.

The strategy with the remaining seven remaining loans has not been confirmed, but it is anticipated there may be further insolvency appointments.

The report read: “It should be possible to refinance elements of the remaining portfolio and we are currently working closely with the borrower companies to assist in this process.”

The anticipated recovery on the property bridging loans vary loan by loan, ranging between from 7p to 100p of the capital by Investors.

Based on the current information, it is estimated the overall average return to investors of their capital will be about 58p in the pound before costs.

Development finance

There are 25 development finance loans with an outstanding value of £116m, which are secured against assets with a gross development value (GDV) of £265m.

The assets range in class and geography, ranging from student schemes in Yorkshire to leisure schemes on the south coast.

The report read: “Many of these assets are only partially completed, consequently the current valuations obtained by the Company are substantially lower than the reported GDV values.”

Some 14 of the 25 live loans currently have formal insolvency proceedings against them, with either receivers or administrators being appointed.

The report read: “The strategy in respect of the remaining 11 has not been confirmed, but it is anticipated there will be further insolvency appointments.

“It should be possible to refinance elements of the remaining portfolio and we are currently working closely with the borrower companies to assist in this process.”

The anticipated recovery on the development finance again ranges between 7p to 100p of the capital provided by Investors.

It is estimated the overall average return to investors of their capital invested will be about 57p in the pound before costs.

 

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