The developer behind Newcastle’s tallest tower has gone into administration with liabilities of £211m, new documents show.
An administrators’ report on Newcastle-based High Street Group totals its liabilities at £211.8m, including £123.6m owed to investors who helped construction schemes including the Hadrian’s Tower apartment block, and £87.7m to unsecured creditors.
The report estimates the company’s assets at £136m, but £134.6m of that is in “inter-company receivables” and administrators say it is unclear how much of that is recoverable.
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The administrators also list a number of local and national companies as creditors of the group, which went into administration last December after a judge said it was insolvent and there was no prospect of rescuing it.
High Street Group was one of the North East’s most prominent developers, leading a hotel, office and flats scheme being planned near St James’ Park and also kicking off a housing development on the former Brett Oils site on the banks of the Tyne in Gateshead.
In recent years it has also completed schemes in Birmingham and the North West, while other developments in those areas were being planned.
Most of its developments have been taken over by other developers after High Street Group suffered major financial difficulties and delays to construction projects during the pandemic. It had also seen one of its subsidiaries being put into administration in 2019 after failing to repay an overseas lender while the company’s accounts have been significantly delayed and two separate auditors have resigned.
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Joint administrators SKSi and Insolve Plus are now holding a meeting next week to discuss the future of the company.
In their report, they reveal how High Street Group raised funds from individual investors with loan notes offering high rates of interest, but was unable to cope when a large number of loan note holders asked for their investments to be redeemed early.
Among the company’s creditors listed in the administration document are Newcastle City Council, Newcastle United Football Club, a number of local and national law and accountancy firms, and Gateshead construction firm Tolent, which built Hadrian’s Tower.
The administrators also say that they are investigating an arrangement between High Street Group and Hadrian Real Estate, which has taken on a number of its projects in the North East. Hadrian was originally part of High Street Group but is now under separate ownership and has taken on some developments with an agreement to use proceeds to pay back some of High Street Group’s small investors.
High Street Group has been contacted for comment. After the court hearing in December which put the company into administration, it said it was “happy with the outcome of today’s court hearing” and was “focused on the recovery plan.”