One of the North East’s best known development companies has insisted it is in good health after a subsidiary was placed into administration amid warnings for the wider group.
Newcastle’s High Street Group is best known for Hadrian’s Tower, the city’s tallest building, as well as plans to develop a large plot of land next to St James’ Park.
The company has also been involved in major housing developments in other parts of the country, and has a leisure division that owns a number of pubs, hotels and restaurants around the North East.
Last year it added a company that specialises in creating new homes on rooftops, aimed particularly at the London market. But that firm ran into trouble and was unable to re-pay multimillion-pound sums to Korean financiers, leading to a court case which resulted in the rooftops subsidiary being put into administration.
During the court case, High Street Group chief executive Gary Forrest and in-house lawyer Stephen Brown warned that any move against the rooftops business could impact on the wider group, hitting hundreds of jobs and potentially putting its major development projects at risk.
Legal documents seen by The Journal show that Mr Forrest told the court that “an insolvency event for one of the companies in the Group is likely to have wide-ranging and serious implications for the rest of the Group which could be catastrophic for the individuals concerned, with some 300 full-time employees and 1,000 subcontractors being affected.”
But the company has insisted that has not happened, and that the failure of the rooftops business has not stopped work on Hadrian’s Tower or any of its other developments.
A company spokesman said: “This case refers to a loan from an Asian investment bank to a subsidiary holding business that was developing rooftop extensions to homes in London. It is a non-core business that has been adversely affected by the Covid pandemic.
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“The board took a strategic decision to withdraw from this niche market and is now in negotiations with the administrator to reach agreement with the creditor. There are no redundancies related to this.
“The case was three months ago and since that time it has had no impact on the wider group. The rooftop business accounts for a tiny proportion, 2%, of the operation of High Street Group, which has £1.2bn of fully funded developments under way.
“The best known in the North East is Hadrian’s Tower, which will be completed on November 17.”
High Street Group, which is based in Newcastle city centre, is based around three divisions, a development group which specialises in apartment blocks around the 海角视频, a construction company and a leisure division which has venues including the Sea Hotel in South Shields and the Purple Peacock, in Newcastle.
It has also taken over plans to develop land close to St James’ Park into apartments, a luxury hotel and Grade A offices.