Davenham to appoint administrators
By Bridging Loan Directory -
Manchester based finance firm Davenham Group is to call in the administrators reports BusinessDesk.com.
The troubled lender has been in difficulty since the onset of the financial crisis due to major write-downs in the value of loans made against properties.
The company’s shares were suspended earlier today as it announced that a banking syndicate led by Royal Bank of Scotland had told the company that it would not renew a banking facility which expired last Friday.
“Given that the Group is unable to repay the amounts due to the banking syndicate following the expiry of the term of the facility, the board has concluded that it should appoint administrators to the company (and to the remaining members of the group),” it said in a statement earlier today.
Court documents announcing Davenham’s intention to appoint administrators were due to be filed by close of business yesterday (Monday).
Administrators are expected to be appointed by next Monday and will continue a run-off of Davenham’s loan book, which has been taking place since June last year.
Attempts were made earlier this year by rebel shareholders including former Secure Trust Bank chief David Anthony to oust the board and to embark on a rescue plan for the business, which would have involved reopening loan books within parts of the business in a bid to grow sales.
Tony Murtagh, the entrepreneur who bought a stake of more than 15% of Davenham shares in a bid to requisition an EGM to replace its board, told TheBusinessDesk.com that he was “disappointed” by the news that Davenham would seek to appoint administrators, but not entirely surprised.
“It was almost inevitable without a new board,” he said.
In March, Davenham said that the size of its loan book had reduced to £65.1m by the end of 2010, although it still owed the banking syndicate £86.3m.