Directors' jobs cut as Whateley acts on Deloitte review.
Graham Whateley's Castlemore Securities has cut a large number of staff and restructured its urban regeneration subsidiary Spring UR, as part of a survival strategy. Spring directors Keith Fenwick and Steve Lelliot have been made redundant. Spring also lost its managing director, Andy Wilkins, last September. Wilkins's departure was not part of the redundancy process. Whateley, who was appointed managing director of the subsidiary on 30 November, and the Castlemore Group management have taken responsibility for Spring. The changes are thought to be part of a restructuring led by Deloitte, which is advising Castlemore on its debt.
Eric Hall, planning and development director at Castlemore, said: "Andy Wilkins tendered his resignation on 1 September 2008 from both Castlemore Securities and Spring UR and has therefore resigned as a director. Both Keith Bennett and Stephen Lelliott have recently taken voluntary redundancy as part of the ongoing restructure and renewal of the Spring business, and consequently have resigned as directors. Looking to the future, Spring owns a number of development sites and has contracts on others, which will be progressed by members of the main Castlemore team."
Speaking about the business, Hall said: "In response to the downturn in our markets we are working on a strategy to reduce costs in line with lower activity. This is an ongoing process, part of which has been a consultation in recent weeks in connection with potential redundancies. During the early stages of that consultation period, a small number of people left in response to the uncertainty that is around. We regret any job losses, but we believe that we have no alternative to managing the cost base in the way we are doing. We are aware that our competitors are doing something similar."
Castlemore and Deloitte are continuing to look at options for the developer's £1 billion development pipeline across the UK. Its options are to sell, delay or even mothball schemes where work has started. Castlemore has already pulled out of the £275 million Brunswick Place regeneration scheme in Leeds. A reduced number of directors remain at Castlemore, among them Brad Critcher and Eric Hall.
Now is the time for both parties to do the honourable thing and tear up the development agreement and let the site owners proceed with a more realistic scheme - which would already have been out of the ground by now had the Council not interfered. What has happened in Sheffield is shameful but it was a disaster in the making from the start. It is the people of Sheffield (and those so badly affected - the site owners) who have lost out yet again. Five years ago I told the Council that their plans were crazy but of course they knew best! Well, sorry to say it Sheffield City Council, but I told you so! Now I hope the new Lib-Dem-led Council will sort this mess out once and for all.
Graham Whateley's Castlemore Securities has gone into administration.
Grant Thornton and Price Waterhouse Coopers have been appointed administrators, representing Lloyds TSB and HSBC respectively. As revealed by Property Week (14/11/08) the company had hired Deloitte to advise it on restructuring its debt. But following a further deterioration in the market the rescue attempt failed. The West-Midlands-based company was founded by Whateley 38 years ago. It had already been forced to make significant redundancies at its subsidiaries including Spring UR, its regeneration arm, as revealed by Property Week in January.
Castlemore shelved two regeneration projects last year including in Leeds where it had planned a £275 million regeneration scheme known as Brunswick Place. It did have a £1 billion development pipeline across the country including Temple Quay in Bristol to Holborn Viaduct in central London. It also owned a significant number of retail parks.
Whateley said "I deeply regret that it has become necessary to take these steps. I have worked hard over my career to build the business, to the point where we were one of the UK's largest independent property firms. Now we have been caught in a financial crisis, not of our making, and in the maelstrom brought about by the meltdown in the property market and paralysis of the banking sector. We have done everything we could to prevent the current situation arising, but these factors were totally outside our control." He added: "Having worked 24/7 for the last 47 years, I now intend to retire, being 65 years of age, but it greatly saddens me to do so under these circumstances." Whateley will be continuing as chairman of Local Shopping REIT and his non-executive role with AIM-listed Arden Partners.
Sixteen companies linked to Graham Whateley's Castlemore Securities have been, or are about to be, placed in administration following the collapse of the parent company last week.
Castlemore Securities went into administration on Thursday last week. Grant Thornton and PricewaterhouseCoopers were appointed administrators. Today Graham Whateley, who remains chairman of the Local Shopping REIT, said that a number of other companies of which he was an executive director had also gone into administration. Castlemore Securities Limited; Britten Investments Limited; Spring Sutton Coldfield Limited; Spring Residential Limited and Castlemore Temple Quay 4 Limited went into administration on 27 February. Whateley said the following companies are expected to be placed into administration imminently: Castlemore Temple Quay 2 Limited; Castlemore Temple Quay 6 Limited; Castlemore Temple Quay 7 Limited; Castlemore Temple Quay 8 Limited; Castlemore Temple Quay 9 Limited; Castlemore West Bar Limited; Castlemore Edinburgh Limited; Wellingborough Engineering Limited; Wigston Investments Limited; Spring Rugeley Limited; and Spring Talywain Limited.