Maxim Park investors face cash call after bank breach

Published on Thursday 5 August 2010 12:00

INVESTORS behind a £330 million, largely unoccupied office park alongside the M8 may have to inject more cash after it breached its bank borrowing agreement.

Talks have been under way for several weeks between the owners of the Maxim business park - the biggest speculative office development in the UK - and Lloyds Banking Group.

Owner Tritax Eurocentral EZ Unit Trust, which raised equity and debt in 2007 to develop the scheme at Eurocentral in Lanarkshire, is now in discussions over the covenant on a 193 million facility.

Investors, who include millionaire Motherwell Football Club chairman John Boyle, have committed an estimated 134m and may be required to inject more equity.

Lloyds could also alter the terms of the loan, which matures in April 2014. A debt-for-equity swap is also an option.

Boyle said yesterday that he held a small investment, probably less than 1 per cent. "To be honest I don't know much about this. It is not a major investment for us."

One of the managers of his investment portfolio, Andrew Lapping, sits on the board of Maxim's developer TAL CPT.

When asked if investors in Maxim would be required to reinvest, he said: "Honestly, I don't know. No conclusions have been reached. But the relationship with the bank is very strong."

Lapping said he did not know how far the value of the project has fallen but he said it is "not a write-off". He said investors' cash was in the bank to meet loan repayments and potential rent liabilities until 2021.

He said: "We have a facility with the bank that runs until 2014 and it is servicing itself. We have got the cash on deposit paying interest costs.

"As a structured investment project it is well funded. The problem we have got is capital values have fallen."

Karen Campbell, chief executive of TAL CPT Land Development, recently left to move to London.

Lapping denied that her departure was linked to concerns over the covenant which emerged last week in trade journal Property Week. Campbell has been replaced by Angus Kennedy.

The ten buildings at Maxim, on the site of the former Chunghwa Picture Tubes factory, remain largely unoccupied. The few occupants include asset management consultancy Currie & Brown, serviced office firm Regus and a number of companies providing services to tenants such as a creche and a sandwich bar.

Lapping said he remained "bullish" about the prospects for the scheme. "We are looking for one big anchor tenant which will attract a wider base of tenants."

Lapping denied that the project was behind schedule in finding tenants, insisting that the scheme was only completed early this year and would not have been able to accommodate tenants before this.