This is a statement taken from the accounts of Fairhold Holdings. (remember it is through Fairhold that Peverel (FirstPort) gets the vast majority of their contracts)
"A Group cross collateralised bank loan of £105,547,983 was due for repayment in January 2013. repayment of the loan was NOT made at that date and in the absence of an extension to the loan fell into default".
If this was not bad enough an inter company loan (thought to be in the region of £54m cannot be repaid. Despite directors increasing the value of the portfolio based on future income streams over a 150 year period by £5.2m a profit of £2m in the previous year has now become a loss of £56m.
Baker Tilly(The Fairhold Holdings auditors) state the following:
"These events indicate the existence of a material uncertainty which may cast significant doubt about the group's or company's ability to continue as a going concern"
At present it has been decided to apppoint a "loan advisor"
The banks have taken the view that it is better at present to allow the current management 2 years to sell the property portfolio in an ordered manner, in order to avoid a fire sale. This process has already begun.
In the meantime all the company assets have had to be pledged to a "lender" who has syndicated out the loans.(this is similar to a credit card default and the credit card company sells on the loan)
Reflecting the financial position Fairhold Holdings find themselves in, interest rates which were an already astronomical 6.46% now have attracted an extra 2% penalty interest rate (remember the bank base rate is 0.5%.
Additional funding is charged at 3.5% and 5.5% above LIBOR.
It should be noted that there are many Fairhold companies (each with their own portfolio). Therefore each "Fairhold" company can be sold, so it is the company that is bought(that comes with the freeholds) thus by-passing the right of first refusal for leaseholders to purchase the freehold.
Of course having purchased parts of the Fairhold Group and thereby owning the freeholds, the new owners may decide not to appoint Peverel/FirstPort as managing agents?
