Blackpool car park penalty was final straw for ailing Nikal

Negative investor sentiment due to the pandemic, Brexit, and the rising interest rates were the root of the developer’s struggles but the loss of an adjudication with a contractor was what finally sunk the business, which went down owing £40m.

Founded as Marplace in 1998 by David Fitzgerald and main funder Alan Murphy, the business became known as Nikal in 2004.

After 25 years of trading, Nikal called in administrators in November, two months after the departure of three of the company’s directors – Richard Fee, Jason Boland, and Michael Cochrane – left Murphy as the sole director.

The appointment of administrators came after Ballast Nedam, the contractor that built a multi-storey car park at the £300m Blackpool Central project, won a £4.6m claim against the developer.

Ballast Nedam completed the car park last year before pursuing Nikal through the courts.

This defeat put paid to Murphy’s hopes of an “orderly wind down” of the business and, without the funds to pay the fine, administrators were called in.

In total, Ballast Nedam is owed more than £7m by Nikal, according to Begbies’ first report on the administration process.

The report states that, following an internal restructure, it became clear that some of the developer’s historic projects were “problematic to complete and realise the expected proceeds”.

Blackpool Central, an ambitious leisure-led mixed-use development featuring several theme parks, was also found to be unviable given prevailing market conditions, the report states.

At the time of the company’s collapse, several interconnected businesses that count Murphy as a director owe Nikal a combined £13.9m but only £1.6m of that amount is expected to be realised, according to Begbies.

Nikal Jersey Limited, the parent company that Murphy’s SPVs sat beneath, is owed £14.3m. Begbies expects there to be funds available to make a “significant” contribution to the parent company.

The largest amount owed to a single creditor is £19m to Masshouse Developments, a company that counts Murphy as a director.

There is no mention in the report of Altair, a high-profile mixed-use scheme in Altrincham that has been in the pipeline since 2008 but is yet to come forward after years of false dawns.