No payout likely from Mountleigh

UNSECURED creditors of Mountleigh are unlikely to get anything back from the collapsed property and retailing group, the receivers said yesterday.

According to estimates by Tim Hayward and Stephen James of KPMG Peat Marwick, Mountleigh's total debts are pounds 590m. These comprise pounds 400m of secured debt owed to a group of banks holding debentures and floating charges, pounds 140m due to bondholders and approximately pounds 50m owed to trade and other creditors.

After meeting creditors yesterday the receivers said: 'We cannot hold out much hope of a payment for unsecured creditors. However, we will make further announcements as the picture becomes clearer.

'As far as we are aware, there are no moves to have liquidators appointed to any of the companies in the Mountleigh group which are currently in receivership and we do not believe that it would benefit the creditors to start liquidation proceedings now.'

The 100 or so bondholders and trade creditors who gathered at Canary Wharf heard that KPMG had so far raised pounds 57m from the sale of properties.

Mr James said after the meeting that several offers for Galerias Preciados, the Spanish department store chain, had been received and were being considered. The UK properties are expected to be sold over a number of years to avoid fire sale prices.

The largest sale was that of two adjoining properties in Knightsbridge, London, believed to have fetched about pounds 16m, to the Kuwait Investment Office for use as a new embassy.

The creditors appointed a five- member committee, which included the Egyptian financier Ashraf Marwan, to represent their interests.

KPMG's estimate of secured debt contrasts with that of Mountleigh's directors, reported at the beginning of August in their statements of affairs. At that time the total secured debt was estimated to be pounds 358m.

Mountleigh's directors called in the receivers in late May in the face of two bond repayments, totalling about pounds 70m, which they could not afford.

Hopes had rested on a sale of the Merry Hill shopping centre in the West Midlands for pounds 125m. But that fell through in April after the purchaser became worried about land contamination.

Apart from 83 properties in the UK, ranging from shopping centres to undeveloped land, Mountleigh has 60 overseas companies.