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Stricken hosuebuilder Stewart Milne Group went down owing the Bank of Scotland 拢108m, an administrators鈥� report has revealed. 

The Aberdeen-based business stopped trading last month after the on 8 January, having failed to find a white knight in a months-long search for a buyer. 

Bank of Scotland had been the group鈥檚 main financial backer in the years up to its collapse, with a term loan and a working capital facility totalling 拢115m.

The facility was drawn to a lower amount by the date of the Teneo鈥檚 appointment but interest on the debt is still being added.

Teneo鈥檚 report described how, in its final years of trading, the group had looked for a sale of the business as it struggled to meet its debt obligations to the bank. 

>> How and why Stewart Milne collapsed: analysing the numbers

鈥淚n December 2021, facing a forthcoming debt maturity, the SMGL [Stweart Milne Group] directors g 鈥� generating proceeds of 拢62m which were applied as repayment of BoS debt,鈥� the report said. 鈥淎t this time, the BoS facilities were extended through to April 2023.鈥�

鈥淎 subsequent M&A [mergers & acquisitions] process was initiated in April 2022, aimed at achieving a sale of the group.  

鈥淭he process was concluded in December 2022 and did not result in a transaction, partly due to the extent of the group鈥檚 contingent obligations in respect of legacy construction projects and the general economic climate.鈥�  

The directors again considered restructuring options in early 2023 but decided another M&A process would provide 鈥渢he best prospects of meeting the group鈥檚 liabilities in full鈥�. Stewart Milne Group was shopped around to roughly 50 parties after this process was launched in May last year.  

But the administrators said that 鈥渄ue to the challenging market backdrop, reduced net asset value of the group and the group鈥檚 contingent liability position, the process did not result in a deliverable transaction鈥� with a line drawn under it all on 3 January. 

As well as the Bank of Scotland, the group owes 拢184,000 to two creditors relating to a scheme in Arbroath called Monarch鈥檚 Rise. 

Teneo said the group, which was established by its eponymous founder in 1975, does 鈥渘ot have material trade debtors鈥� but the administrators have identified tax debtors and other loans that they could realise value from. 

A large part of the administration process will consist of selling the group鈥檚 land and partially completed developments. 

Stewart Milne Group had 10 partially completed residential developments in Scotland, as well as 12 non-operational land sites and 42 contractual options to purchase land. 

The group had 329 employees when it entered administration and according to Teneo鈥檚 report, 208 of these are entitled to ordinary preferential claims, which are amounts owed to employees for arrears of wages and salaries, holiday pay and pension contributions. 

It is estimated that these claims will amount to 拢200,000 and that there may be sufficient funds available to enable these to be paid in full. HMRC鈥檚 secondary preferential claim of around 拢1.8m, in respect of PAYE, employee NICs and CIS deductions, may also be repaid, according to the report. 

But the group鈥檚 1,375 unsecured creditors, who are owed nearly 拢154m, are 鈥渦nlikely鈥� to be get their money back. Teneo said it expected the amount claimed by unsecured creditors to rise as more come forward.

BDO is currently carrying out the administration of Stewart Milne Homes North West England (Developments) Limited, another entity within the wider corporate group,