Administrators for YPG’s stalled Islington scheme have appointed JLL and Wignall Brownlow to sell the site and reported that investors are unlikely to get back the combined £7m they ploughed into the project.
In September, FRP Advisory was appointed as administrator to the YPG subsidiary delivering the 413-apartment Fabric Village in Liverpool.
YPG Investar Islington House owes £3.9m to loan provider Cynergy. In early 2020, the company took out a bridging loan to cover the cost of the site it had bought with another loan – this one from West One Loan – in 2018.
In the latest update from FRP, available on Companies House, the administrators predict the YPG has insufficient funds to repay investors.
Investors had paid deposits amounting to £7m on 170 off-plan apartments in the 219-home first phase of Fabric Village, known as Fab1.
FRP did not disclosed how much it would seek for the sale of the site, which YPG paid £3.25m for three years ago.
In total, the company has debts totalling £11m.
YPG director Ming Yeung told Place North West he has “every intention” of submitting a bid to regain control of the site.
He said his proposal would be “the most complicated” but that it would provide the best outcome for creditors.
The sale of the site could be of interest to Legacie Developments too. In recent times the company has acquired several stalled schemes.
These include two Elliot Groups projects – the £250m Infinity scheme in Liverpool and the 300-apartment The Residence in Salford – as well as the 145-apartment second phase of Parliament Residence, also in Liverpool.
In addition, a joint venture between Legacie and Nexus Residential acquired Primesite’s The Rise on the corner of Low Hill Street and West Derby Street.
Speaking after FRP’s appointment, Yeung said he was “devastated” and blamed the pandemic for the project’s collapse.
An £18m funding deal with Maslow Capital fell through prior to the national lockdown in March 2020. As a result, YPG could not repay the bridging loan to Cynergy.
YPG was in talks with London Wall Lending over taking out another bridging loan to repay Cynergy and ward off the threat of administration, Yeung said.
However, before that deal could go through, YPG discovered that 70 investors held unilateral notices on the land.
UN1s secure an individual’s investment and are designed to ensure creditors are repaid in the event of administration.
With UN1s in place, a new lender’s position is riskier, Yeung explained. As a result, the deal with London Wall could not complete until they were removed.
Unable to repay Cynergy before the expiry of the loan facility, administration proceedings began.
Two other YPG-owned companies are currently facing difficulty.
Earlier this month, FRP was appointed to YPG Fabric Residence, another vehicle behind the Islington scheme.
In addition, liquidators were appointed to the company’s contracting arm, North West Development Consortium – formerly YPG Group – last year.
Yeung resigned from that company following the sale.