Concerns have been raised over the stability of developer Genr8 by Simon Danczuk Labour MP for Rochdale. He has told Rochdale council to look at other potential investors before signing an agreement between the authority and developers Genr8. He said “It is a matter of record that Genr8 have a very low credit rating and they are described by the UK’s leading credit reporting agency, Experian, as ‘a maximum risk company’.
For three years both in Stoke-on-Trent and Rochdale, Genr8 have been promising ‘exciting times’ and saying they are in advanced talks with big chains – but absolutely nothing has come of this and rightly Simon Danczuk MP has serious concerns about their ability to deliver major regeneration projects like these.
In Stoke-on-Trent the situation is possible of more concern now that Realis company report has been published as the Auditor found “material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern”. Yes these are difficult times and many companies are struggling, but not all compaines have such strong ties with the local authority and its spending and regeneration plans. Stoke on Trent Council have £100’s million tied to and pledged for Hanley regeneration, what if this two major schemes fail, what then for Hanley and Stoke Town?
REALIS ESTATES (SOT) LTD
INDEPENDENT AUDITOR’S REPORT TO REALIS ESTATES (SOT) LTD
UNDER SECTION 449 OF THE COMPANIES ACT 2006
Emphasis of matter – Going concern
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in note 1 to the financial statements concerning the company’s ability to continue as a going concern. The company incurred a net loss of £11,030,302 during the year ended 31 December 2011 and, at that date, the company’s current liabilities exceeded its total assets by £15,408,564. The company at 31 December 2011 has amounts owed by group undertakings of £159,044 the recoverability of which is dependent on the ability of other group undertakings to continue as going concerns. In addition to this the company has loans of £24,235,173 which are repayable on demand. These conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
6. SECURED LIABILITIES
Security has been given by the company in respect of bank loans and overdrafts of £24,254,l03 (2010 £23,784,477) included in creditors
The directors have been informed by Bank of Scotland plc, part of the Lloyds Banking Group, that on 14 August 2012 they agreed to sell all amounts owing to them under loan facility together with all security and rights relating to that facility to Oaktree Capital. The transaction will complete on 28 September 2012.
Local MP Joan Walley is already attempting to ensure those responsible for the deal with Genr8 are addressing the risks, but what of our Local Councillors? So far they have remained quiet about any possible risk, claiming Genr8 and Realis developments are the future saviours of Stoke on Trent. taking on board the £59M loan and the Civic Centre moving out of Stoke Town, have they asked any assurances that Genr8 and Realis are capable and can deliver a successful schemes for the benefit of all, or is it to be another Worldgate but on much, much a bigger scale.