Monaco entrepreneur's property group collapses owing £69m

Monaco entrepreneur's property group collapses owing £69m




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The commercial property group of Monaco-based entrepreneur, Nathan Kempin, has become the latest developer victim of the recession, after it was put into administration on September 16.

Cathco Property Holdings, whose registered office is in Leicester, has appointed joint administrators Nigel Nutting and Mark Fry from the insolvency firm, Begbies Traynor.

The property developer’s last set of accounts, filed for the year to May 31 2008, recorded a pre-tax loss of £6.6 million on sales of £1 million.

Although at the time the group owned assets worth over £85 million, it owed £69 million on long term loans.

Cathco Property Group was in the middle of building an impressive 50,000 square foot Tesco supermarket and 19 retail units in Denbigh, North Wales. Work has already stopped on the site, and it is now feared that over 450 construction and retail jobs could be lost.  

Speaking with North Wales newspaper, the Daily Post, Denbigh councillor Ray Bartley called the administration ‘a major blow’, adding: “I’ve been a supporter of this scheme since the beginning and am sad to hear this has happened. I hope the administrators can find the funding so this scheme can go ahead.”

Begbies Traynor has confirmed that they have been appointed and are currently assessing the company’s affairs.

“We will be able to comment further in due course,” a press statement said.

Development lender and industry expert, James Bloom of

Regentsmead

, said that the administration was a “classic case of a development company over-expanding”.

He said: “The company’s assets are leveraged at 80% of value - which in the current climate where lending margins are typically at between 50-60% - leaves them no breathing space. They would find it almost impossible to re-finance in this illiquid market and are therefore at the mercy of their financiers, which is not a good place to be at present.

“It also highlights the most common reason businesses go broke and that is poor cash flow, having equity in assets is fine in a liquid market but in this market it does not help when cash flow is tight. Cash is king for a good reason; it can see a business through difficult times when assets do not assist. It is a harsh lesson for all businesses, particularly those that rely on high levels of gearing to achieve growth.”

Mr Bloom added: “We have all been warned and we should learn lessons from history, anyone can make a mistake but only a fool continues to make the same mistake whilst expecting a different outcome.”

The property developer’s website hasn’t been updated recently, still stating that it is preparing a planning application for the Denbigh retail scheme ‘to be submitted in the summer of 2007’, nor does it mention the administration.

None of the company directors were answering their telephone extensions when Bridging and Commercial attempted to call, and it is thought that Nathan Kempin still lives at his Metropole Residence in Monte Carlo.

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