A company which was behind plans to build a major student accommodation building in the city centre owes buyers £23.9m.
Mount Group Student NatEx Ltd, which was building the £45m NatEx student accommodation block on the site of the former National Express bus station, collapsed into administration last October.
A report by administrators Mazars has revealed that the company accepted a total of £23.9m from buyers in the form of deposits.
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A spokesperson for parent company the Mount Property Group told the ECHO that the scheme collapsed after their lender LT Prime entered into administration, and that the company still hoped to deliver the scheme.
The site, at the junction of Frazer and Norton Street, is now stalled.
The report by Mazars reveals that the buyers appear to be divided into two main groups. The majority of buyers, who are owed £18, 660, 119, have not received unilateral notices (UN1s). The notices provide individuals with a charge which is recorded by the Land Registry.
The second group of buyers, who have received UN1s, are owed £4, 974,666.
The report explains that the group of buyers with UN1s are expected to have priority over all other creditors. The report also explains that the buyers' deposits were used to pay for the site to be built.
The report reveals some of the background to the company's collapse.
It reads: "The company began to experience problems in April 2020 as the impact of Covid 19 pandemic and the national restrictions imposed by the UK Government began to have an effect on the construction industry, resulting in delays in construction progress on the property."
The company entered into a loan agreement with LT Prime worth £5.3m.
The report also reveals that there is a 24/7 guard in operation at the site, which is costing £2,688 per week to man.
The redevelopment of the city's former National Express bus station was hoped to feature over 500 accommodation units made up of cluster rooms and studios as well as large social spaces, a fully equipped gym and communal study areas. The 574-bed project was set to consist of 16 and 10-storey towers.
The Mount Property Group bought the New Islington-based NatEx scheme from Welsh company Anwyl back in 2018.
A spokesperson for the Mount Property Group said: "Mount Group Student NatEx Ltd went into administration following the collapse of the funder LT Prime. However we still hope to deliver the NatEx Ltd through a CVA (Company Voluntary Arrangement route.) "
Patrick Lannagan and Julien Irving, partners at Mazars, were appointed joint administrators of Mount Group Student Natex Limited on October 5.
Mr Lannagan said to the ECHO: “At this early stage we are working with the intention that we will be able to return a sum to the parties which have paid deposits towards the development, however it is too early at this point to confirm the scale of these returns.
"As Administrators we will be providing regular updates to all creditors in a clear and timely manner”.
The report referred to in this story was posted on the Companies House website in December last year.
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