£57.7m deal struck for Ethel Austin Investment Properties
ADMINISTRATORS struck a £57.7m deal to transfer around a quarter of Ethel Austin Investment Properties’ (EAIP) 400-building portfolio to a related company in a ‘pre-packaged’ deal.
The transaction was funded by the Liverpool firm’s major creditors, Lloyds and the Royal Bank of Scotland, and enabled them to roll their loans and the EAIP assets these were secured against into a new company, New Embrace, which is owned by a sister company called Ethel Austin Property Holdings (EAPH).
The details are included in a creditors’ report into the demise of the property investment company which was placed into administration in September following the slowdown in the commercial lettings market and poor performance in some of its joint ventures.
Management accounts show exceptional costs of £44m in the 18 months to March, 2010, left the £7m turnover business with pre-tax losses of £38.7m. Some £23m of the exceptional figure was a bad debt provision, a further £13m related to loan guarantees.
EAIP’s failure left Lloyds and the Royal Bank of Scotland owed £59m and unsecured creditors with debts of £51.2m. In their report the administrators, Bill Dawson and Neville Khan of the accountancy firm Deloitte, said the deal will generate a better return for unsecured creditors. They are continuing to negotiate the sale of the remaining properties.
EAIP is jointly owned by the Austin family, which started the Ethel Austin retail chain, and Barry Owen, chairman of Liverpool property consultant Mason Owen.
He also chairs the Austin family-owned EAPH which has an estate of some 1,000 properties. Lloyds and RBS agreed to a £100m refinancing of this business weeks before EAIP was put into administration.
New Embrace acquired assets which consist of 66 properties owned by EAIP, five owned by subsidiary London and Palatine Estates and 14 shareholdings in joint ventures which own 33 properties.
