The developer responsible for Newcastle’s tallest building - Hadrian’s Tower - is applying to go into administration after a series of reversals and criticism from investors, customers and contractors.
High Street Group, which was also developing land next to St James’ Park and on the Gateshead riverside, has told investors that it will go to court in December to put its parent company into administration.
Over the last two years, the company has twice seen its auditors resign while its accounts are significantly overdue and a number of its subsidiaries are facing being struck off.
Read more: go here for more North East business news
It hit major difficulties during the coronavirus pandemic, saying that a number of its institutional funders had withdrawn financing for development schemes.
A number of its development sites have now been taken on by other companies, but in a letter to High Street Group investors seen by The Journal, chairman Gary Forrest says that progress is being made on projects in Newcastle, Birmingham and elsewhere.
He adds: “The decision was made to place High Street Group Limited into Administration. This does not prevent the projects as listed above from progressing. It will also provide an extra layer of protection to the investors, in that independent licenced insolvency practitioners will be monitoring the projects and providing regular reports to all Creditors.
“Upon completion of the projects, the funds generated through the indemnities will be dispersed to the loan note holders by the administrators.
Most Read
“We understand that the Investor Committee, having completed their due diligence and support the potential recovery plan and furthermore are satisfied that the assets are available to allow full recovery of the investor loan notes.
“I personally believe that this proposal offers a genuine opportunity for a full recovery and that the partners / funders involved in these projects have the capability to maximise the value within assets.”
High Street Group has been one of the North East’s most prominent developers of recent years, leading the construction of Hadrian’s Tower and planning a major scheme next to St James’ Park as well as the redevelopment of the former Brett Oils site in Gateshead.
It also had a number of major developments in the Manchester and Birmingham areas, specialising in the private rental sector.
Last year auditors PwC resigned, saying it had not been able to obtain the information needed to complete a reliable audit on the company. Replacement accountants Haines Watts also resigned, saying in October that High Street Group had not paid its fees.
A number of its property schemes are now in the hands of Hadrian Real Estate, which started as part of the High Street Group before being taken over by new owners.
Meanwhile, a number of High Street Group’s restaurants and bars in the North East have been taken on by the One Collection Group, which also started as part of part of the High Street Group.
The Journal has contacted High Street Group for comment.