The developer behind the stalled £77m Angelgate scheme in Manchester, which entered administration last month, owed its creditors £29.7m at the time of its collapse, documents have revealed.
A statement of affairs prepared by the company’s director Carl Mills showed that Pinnacle (Angelgate), the special purpose vehicle set up for the development, owes £29.7m to creditors on the 344-home development off Dantzic Street, which has been subject to delays and a police investigation.
Administrators Moore Stephens were appointed on 2 October this year after an administration order was imposed on it by the High Court following legal proceedings by overseas investors.
The documents value the developer’s assets at £11.9m, leaving a potential black hole of £17.8m which may not be recovered.
The total owed of £29.7m includes £17.8m owed to 196 creditors who paid a deposit for apartments at Block A, and £12.8m owed to 148 creditors for Block B.
Most of the individual creditors are owed between £50,000 and £150,000, depending on whether a deposit was placed on a one-bedroom or two-bedroom apartment, and the amount paid for each property.
Pinnacle (Anglegate) also owed £800,000 to 87 buyers who had paid for car parking at Block A, and £616,000 to 75 buyers who had purchased parking space at Block B.
The land at Dantzic Street has a book value of nearly £7m, but Mills expects the company could raise £9m from its sale.
HMRC is also listed as a debtor to Pinnacle to the tune of £2.9m, leaving a total value of £11.9m available to preferential creditors – some £18m below the total owed.
It is understood Moore Stephens will issue a statement of proposals to buyers and other creditors next week.
The administrators have said that they “do not agree with the director’s statement of affairs” but added they “are unable to comment specifically until their administrators’ proposals have been issued”.
The troubled scheme has been subject to a series of delays ever since work on the site stalled in 2016. Original contractor PHD1 exited the scheme in March last year and entered administration soon after, while Goodwin Construction was appointed as PHD1’s replacement in April this year.
The developer blamed the delay on the loss of its contractor, and said that it has struggled to find a new construction company to take on the build at the original quote price as “PHD1 had significantly under-valued the build costs.”
Greater Manchester Police is also investigating whether any fraudulent activity had taken place on the project following complaints from overseas investors.
In April this year, the police said: “GMP has received around 70 complaints surrounding a property investment in the city centre of Manchester.
“These complaints have been recorded as fraudulent offences and are currently being reviewed and assessed by specialist officers.
“We continue to keep the victims updated, these are complex matters which need to be looked into thoroughly before a decision is made with regards to the best course of action.”
Pinnacle (Angelgate) and GMP have been contacted for comment.