March 23 2009

Mountgrange Capital is being administrated by Deloitte after Bank of Scotland withdrew its support for Caltongate, Edinburgh and Phoenix Park, Glasgow.

The blow comes despite both schemes receiving planning permission, after tortuous negotiation.  But UK banks are now dramatically scaling back their exposure to commercial property lending.

Mountgrange directors, Martin Myers & Manish Chande are now considering alternative funding options and are thought likely to raise a £200m fund to buy back those assets currently in administration.

Myers and Chande confirmed: "We believe that these schemes continue to have commercial merit. Despite our best efforts, continued funding from existing banking channels is no longer a feasible option. We are, therefore, examining other alternatives including making an offer to buy the assets out of administration and are uniquely placed to do so".

Caltongate would have been the biggest development in Edinburgh’s Old Town since the 12th century.

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