West Residential Ltd. (SC336798): administration
- Status
- Administration ended
- Administration began
- 2011-04-04
- Administrators
- John Charles Reid, Dominic Lee Zoong Wong
- Administrators' firm
- Deloitte
- Formerly
- Bellshelf West Limited
- Incorporated
- 2008-01-28
- Location
- Glasgow
- Industry
- 4521
Why it went into administration
- Sustained trading losses
From the administrators' statement
The Company undertook a management “buy in” in March 2008. The Directors advised that this took place during a period of extreme profitability and a buoyant housing market. However shortly thereafter, the global recession in the housing market commenced and the Company's sales declined.
The Directors further stated that a number of contracted purchases were also completed, but mortgages were subsequently withdrawn. Over a period of time, the Company then had to resell these properties, all of which were at significantly lower prices. One of the defaulters, was in respect of the sum of £900,000, which resulted in the Company being in breach of its banking convenants. As a result, the Company had to re-negotiate its lending terms with the Bank and also have its assets re-valued. Accordingly, a considerable reduction was applied to the value of the assets which resulted in a debt to value shortfall.
The Company continued to construct and sell properties throughout 2009 and 2010, but with the decreasing sale values being achieved, profit margins were not sufficient to reduce the loan to value shortfall that existed and as a result the Directors, following consultation with the Bank, considered it no longer viable to continue to trade. The Company ceased to trade in January 2011. The Directors subsequently sought the appointment of the Administrators.
Administrators' statement of proposals (2011-06-06) · Companies House register