Lloyds left 1.3bn out of pocket from Kenmore demise and Admiral swap
Kenmore Property Group, which collapsed into administration last week, owes more than £700m to Lloyds Banking Group.
Kenmore, which controlled £1.8bn of assets, was put into administration last Thursday by Grant Thornton, after becoming incapable of meeting any of its existing business obligations as a result of falling home sales.
Owned by one of Scotland’s wealthiest men, John Kennedy, Kenmore made a loss of £85.7m in the year to June 2008. But HBOS’s Peter Cummings – known for splashing cash at property secured ventures – agreed £875m of refinancing a month before he left his post as commercial property director, allowing the firm to trundle on.
Lloyds has now agreed to extend emergency funding so that the firm can continue to trade as a going concern, but 21 of the Kenmore Group’s companies have been placed into administration and a further two into receivership. It is believed managing director Rob Brook is in talks about leading a management buyout for certain parts of the business.
Lloyds was also facing this weekend a further £600m hit from collapsed pub chain Admiral Taverns, as a result of its merger with collapsed HBOS last year.
The proposed debt-for-equity swap will come this week in the form of a pre-pack administration – with Lloyds taking control of the pub chain.