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Revealed: Scale of debt owed by owners of Kendal's K Village
THE financially-stricken owners of Kendal’s K Village complex owe more than £68 million to creditors.
Administrators KPMG laid bare the full extent of Kendal Riverside Ltd’s debts this week in a report sent to companies due money from the firm.
The document reveals the company owes £55.3 million to the Bank of Ireland and a further £12.8 million to unsecured creditors, including £2.8 million to Miller Construction and £620,000 to people who have paid deposits for riverside apartments at the centre.
Information is based on the company directors’ assessment of what is owed.
KPMG said rescuing the firm was unlikely and its efforts were now focused on valuing the company’s assets – the Lakes Outlet shopping centre, around 90 apartments and office space – with a view to putting them up for sale.
Joint administrator Stuart Irwin said there had been ‘a lot of interest’ in the site, mainly from agents acting for un-named businesses, but no serious discussions had been held.
He told the Gazette that a ‘concerted’ marketing drive to promote K Village would take place to boost interest in the vacant retail units.
“I’m very encouraged by the interest that we have had,” said Mr Irwin.
“What level of interest is going to be forthcoming and what price someone is going to pay I don’t know, so it’s difficult to determine what the bank and creditors will get back.”
He stressed that it was ‘business as usual’ for the centre, which was continuing to trade and collect rent from tenants.
He said he hoped to have the complex valued by an agent within two to three months – and only then would the administrators decide whether to put it on the market, either as a whole or in parts, or keep hold of it.
Mr Irwin also revealed that a ‘significant’ number of people had paid deposits for apartments at the site and he had not yet established why they had not been able to move in.
The document revealed that demand letters were sent to Kendal Riverside by the bank on December 21, just a week before administrators were appointed.
The bank debt is made up of a £34.2 million loan plus interest.
Other outstanding payments include £37,600 to Cumbria County Council for road improvements, £178,508 to South Lakeland District Council and an undisclosed HMRC tax bill. And more claims continue to be submitted.
Belfast-based property firm Valto Limited, named in the document as shareholders in Kendal Riverside, is listed as being owed £4.2 million.
Coun Ian Stewart, South Lakeland District Council’s portfolio holder for economy and enterprise, told the Gazette the figure due to be paid to the council had not been formally verified by KPMG.
The sum was mostly monies due to the council under the terms of a planning agreement to contribute to the Highgate regeneration scheme.
It totalled £100,000 owed at the time of administration and a further £60,000 due by 2015.
Coun Stewart said: “The planning agreement is a charge against the property and can be recovered from a future owner.
“A further £18,000 is due in council tax payments for the current year.”
The report states that Kendal Riverside’s three directors cite the economic climate, a fall in property prices and lack of bank funding as reasons for the company’s failure.
K Village is valued at £34.2m based on an estimate in 2011.
But this figure is believed to have dropped because of the centre’s tenancy status and the financial climate.
Built on the site of the former K Shoes factory, K Village was one of just two retail complexes to open in the UK in 2010.
Bosses had hoped to attract 1.5 million visitors and 4,000 coaches a year.
KPMG were appointed administrators on December 28, 2012.