Manchester-based developer in race to negotiate new banking facilities
The auditor of developer Urban Splash has said there is 鈥渟ignificant doubt鈥� the firm can continue to trade unless it is able to renegotiate over 拢200m of loans.
In a note to the firm鈥檚 accounts, Damian Sanders, chartered accountant at Deloitte, said the ongoing renegotiation of 拢206.8m of loans with the firm鈥檚 lenders created 鈥渕aterial uncertainly鈥� that it could continue as a going concern.
The loans are currently repayable on demand because of a combination of breaches of the firm鈥檚 banking covenants on 拢113.6m of loans and other loans being overdue for review.
However, the firm鈥檚 chairman Tom Bloxham said he remained confident that it could reach a deal with lenders.
鈥淲e are fortunate to have funders who have been very supportive of the group through the last three years and are hopeful that we can conclude our negotiations with them in the next few months, putting the group on a sound financial platform for the foreseeable future,鈥� he said.
Urban Splash reported a deepening pre-tax loss of 拢15.4m in the year to 31 March 2012, up from 拢9.4m in the previous year.
The firm increased turnover to 拢33.7m up from 拢29.1m over the period.
Bloxham said: 鈥淚t has been (another) tough year and we continue to work in a difficult economic environment.
鈥淭he general economic malaise and downward pressure on valuations has had an impact on our commercial property portfolio, while the continued lack of availability of mortgage finance has acted as a barrier to potential homebuyers for our residential portfolio.鈥�
Bloxham added that the strength of the Urban Splash name would help it, saying it is one of 鈥渧ery few true property brands鈥�.
In November last year, the firm announced it would have to because of a drop in workload. This followed the departure , of two Urban Splash directors including deputy chief executive Nick Johnson.
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