Homes England recovered more than £9m it lent to the collapsed Stewart Milne Group, after loaning administrators a further £1.6m to help fund their work.
Insolvency specialist BDO revealed the move in a report outlining the successful sale of four of the homebuilder’s main development sites in England, for almost £18m.
Manchester-based Stewart Milne Homes North West England (Developments) Ltd went into administration in January, four days after the other entities at the Aberdeen-headquartered company folded.
As Construction News revealed at the time, it had received a series of loans from Homes England since 2018 – with the taxpayer-funded housing agency still owed more than £9m by the business when it went under.
The BDO report details how Homes England then gave “advanced funding of £1.6m during the administration to support the costs of the administration including payroll, security, health and safety compliance, insurance and warranty cover, and third-party professional fees”.
This took the debt owed to the body up to £11.6m, but enabled work to continue at four sites in Lancashire and Cheshire – at Broughton, Congleton, Hooton and Warton – where a total of 198 units were due to be built, and 18 had been partly completed.
The sites were sold to developer Elan Homes for £17.9m in June.
As the senior secured creditor of the English arm of Stewart Milne, Homes England has already been paid back most of the money it was owed and is expected to receive the rest, about £100,000, by the end of the administration process.
The outcome for the agency stands in contrast to other creditors of the former £170m-turnover business.
A separate report by Teneo, which is handling the administration of its main Scottish businesses, revealed Bank of Scotland was owed £107.9m when Stewart Milne collapsed, and will not recoup the full amount, with administrators still assessing the level of payment it might receive.
Unsecured creditors of the homebuilder, including its supply chain, are set to lose all of the money owed.
Teneo had previously estimated their losses to amount to £153.8m, but it has only received claims for £33.4m so far.
It said this was due to a lot of the total actually relating to money owed to other companies within the Stewart Milne Group, for which claims have not been lodged.
Another £208,519 was owed to unsecured creditors of the English arm of the business. BDO said it did not expect that it would receive any money.
Founded in 1975, Stewart Milne Group went under after repeated, failed attempts to sell the business, ahead of chair and founder Stewart Milne’s planned retirement. More than 200 people lost their jobs when the group folded.
At the time, a statement from Milne said: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, subcontractors, suppliers and customers.
“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it.”
