City Lofts in administration but ongoing developments saved

Holding company City Lofts Group and its subsidiary City Loft Developments have been placed into administration with Ernst & Young appointed as administrators.

A statement from EY issued on Friday said: "The directors of City Lofts Group Limited have appointed Maggie Mills, Angela Swarbrick and Charles King, partners and directors of Ernst & Young LLP, as administrators of CLG.

"An application to court has also been made for the appointment of the same individuals as administrators of CLG's wholly-owned subsidiary, City Loft Developments."

Last week, unsold apartments in six sites including Salford Quays and Princes Dock, Liverpool, were placed in receivership.

The latest statement continued: "It is anticipated that the administrators will review the position of the two holding companies with the intention that the group's current individual developments under construction (other than those in respect of which receivers have already been appointed) should be able to continue unaffected so that value is maintained in the wider group.

"The individual operating companies that are carrying out the group's current developments have not been placed into administration. In particular, City Lofts (Half Tide Dock) Limited (Liverpool) and City Lofts (Sheffield) Limited (Sheffield) are continuing to trade with the intention that their respective developments should continue. New directors have been appointed to the boards of these operating companies, in consultation with the lenders to the relevant developments, in order to strengthen and support the boards and management of these companies."

Also excluded from administration is the 261-unit Milliners Wharf scheme in Ancoats, Manchester, due for completion in spring 2009 and now released for sale.

At Half Tide Dock, Liverpool, next to Princes Dock, work is nearing completion and 48 of the 121 flats have been sold. Prices range from £158,995 for a one-bed to £220,995 for two-bed. Knight Frank is sales agent.

However, the move into administration does not offer the same guarantee for City Lofts' joint venture with David McLean at Trinity Dock, part of the Kings Waterfront development that includes the Arena and Convention Centre Liverpool.

Trinity Dock would deliver 429 apartments to the south of the ACC but has yet to start on site.

City Lofts was formed in 1996 and was AIM-listed before being taken private in January 2007 when an investment vehicle owned by JER Partners and Lehman Brothers bought a 30% stake.

The remainder is owned by founders Stuart Wright, chief executive, Rossano Mansoori-Dara and Anthony Brooks who each own 18.6% of the company.

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