Liverpool-based investor the Austin family is calling time on its property empire.
The family, the former owner of budget clothing chain Ethel Austin, is winding down Ethel Austin Properties as a result of the expiry of its £88m of bank debt and the realisation that it will not be able to make enough cash to pay back its lenders.
In accounts for the year ended 31 March 2011, filed at Companies House this week, the firm said that it was preparing its figures on a break-up basis as it had breached its banking covenants at the end of September 2011; its debt had expired at the end of December 2011; its balance sheet was £18m in deficit, meaning that an asset sale was likely to be insufficient to repay its loans; and its forecast income was less than the running costs of the business.
Although the family sold out of the Ethel Austin chain in 2002, retaining just a 7.5% share until 2005, the retailer was a major tenant across its portfolio representing 30% of its income. Ethel Austin, the clothes chain, had been rescued from administration numerous times during the 2000s. It collapsed again in June 2011.
Ethel Austin Properties’ lenders – Royal Bank of Scotland and Lloyds Banking Group – are continuing to support the group while it works to repay its debt through asset sales.
The firm said: “Once the group has realised its assets, the directors consider that it is unlikely to acquire any new assets, so there will likely be no realistic alternative other than to liquidate the business.”
Ethel Austin Properties, which holds £71m of assets, said it expected to have concluded its business by the latter part of 2013 or early 2014.
A review of the firm’s property by CBRE and Mason Owen, whose founder Barry Owen is also a director of Ethel Austin Properties, has been undertaken to find out how much could be realised through sales over the 2012-13 financial year.
The wind-down of Ethel Austin comes despite it agreeing a £100m refinancing deal with its banks in September 2010.
samantha.mcclary@estatesgazette.com
