Proxima GR Properties are one side of the freeholding companies(the other part being the Fairhold group) ulimately controlled by the Tchenguiz Family trust.
Loans to purchase the freeholds were granted on terms then unheard of in the financial sector. Valuations were grossly inflated and spread over 150 years.
Close friend of Vincent Tchenguiz and senior loans manager at HBOS, Peter Cummings received a fine and a subsequent lifetime ban from ever working in the financial sector, in part due to the loans granted to Tchenguiz.
It has been said that around 70% of the loans Peter Cummings arranged were "Well outside the normal bank lending criteria"
The unique selling point for Tchenguiz was that not only could he rely on the stable income from ground rents, but because he owned the managing agents (Peverel/Firstport) ways could be found to engineer funds from leaseholder service charge trust funds ending up with the freeholding companies and thereby being able to service loans. This is one of the key reasons for the Kingsborough 33% commissions, work that was not needed being "created" and of course the price fixing scandal. This is also why contracts to manage containe a clause"allowing Peverel/Firstport to keep any profits derived from any bulk purchase agreements"
Both Robert and Vincent Tchenguiz were caught up in the Icelandic bank crash and the empire began to fail, resulting in several defaults.
the final nail in the coffin for Tchenguiz was the failure to re-unite Peverel/Firstport with his freeholding companies, thus the funds he needed to service his debts were denied to him. He still had the ground rent income, and where he was able to do he took away the insurance role from Kingsborough and brought it "in house".
Leaseholders may have noticed recent increases in premiums that are not entirely explained by "confidential" claims records?
Tchenguiz was forced to put his portfolio up for sale in what was termed Project Mcdonald.
In the case of Proxima GR Properties(and asociated companies) Long Harbour paid 400 m pounds for a part of the portfolio which staved off Proxima being placed into administration.
In 2015 a new company was formed by the name of Betelguese. This was a vehicle to restructure Proxima GR Properties.
Rothesay Life paid around 223m in one tranche and 300m pounds in a subsequent one and lent Betelguese (parent to Proxima) 650m pounds at an intererest rate of 3.8% over a 65 year term.
The 650m was to cover all non inter- company loans.
At the time of the take-over it was discovered that the valuation put on the property assets put at 1.45 billion pounds was excessive and had to be reduced by 109m pounds.
So it can be deduced that on a Tchenguiz inspired valuation of 1.45b the assets have actually been bought by venture capitalists for 900m pounds. Quite a discount!
