Administrators appointed to Manchester’s Blackmore Bond

Manchester-based Blackmore Bond has been placed into administration.

Blackmore was founded in Manchester in 2016 issuing mini-bonds to retail investors with a minimum £5,000 investment.

With the money raised, the company, via wholly owned special purpose vehicles (SPVs), invested in a portfolio of property development projects.

It is understood that the value of the outstanding bonds totals around £45m.

Bondholders have not received their contractual quarterly coupon payment since October 2019, despite assurances from the directors throughout 2020 that the situation would be resolved.

A representative bondholder recently took the step to issue a winding up petition against the company.

Having become aware of the winding up petition and with increasing concern about activities affecting the interests of the bondholders, the Security Trustee took steps to appoint administrators.

Geoff Bouchier and Benjamin Wiles, of Duff & Phelps, were appointed joint administrators of Blackmore Bond plc on April 22, 2020.

Geoff Bouchier said: “There has been concern regarding the company’s affairs for several months so it will be a relief for bondholders that independent professionals have now been appointed to the company.

“We are immediately undertaking a review of the properties and will immediately commence an investigation into the company financial position.”

In late March this year Blackmore Bond warned investors waiting for delayed interest payments that a property market crunch brought on by restrictions caused by the coronavirus pandemic would make it harder to find cash.

The business, which uses funds from investors to build houses then pays a return from the sales profits, had already failed to distribute quarterly interest payments for October and January.

It warned that the situation would get worse after Britain’s housing market was effectively frozen when the Government discouraged buyers and sellers from pursuing transactions to try and slow the spread of the virus.

In January this year Blackmore Bond failed to meet a second interest payment in three months.

It was due to pay out as much as 9.9 per cent to investors, but blamed a ‘slow property market’ for the missed deadline.

Blackmore Bond had already missed one coupon payment in October. It said it would make those payments at the end of December, but missed that deadline as well.