THE Russian partner of Liverpool skyscraper developer Beetham is on the brink of collapse, putting a question mark over a £1bn landmark scheme in London.
Earlier this year, the Daily Post reported that securing backing from the Mirax corporation and receiving planning permission for the development at London’s Blackfriars was crucial to Beetham’s future amid mounting debts. Billionaire Sergei Polonsky's Mirax group took a £112m stake in the project, but has now had its assets frozen by a Moscow court over a £150m debt it is unable to meet.
Mr Polonsky is reported to have said in Moscow: "We haven't managed to secure a single loan for construction, and in the past month we haven't sold a single square metre of housing or collected any instalment payments for the real estate we've already sold.
“We may not survive, but if we are destined to perish we will do it with our heads held high." Beetham refused to comment about the news from Russia.
Beetham’s 52-storey scheme occupies a prime location on the banks of the River Thames. It has already secured hotel operator Jumeirah and was given the green light in March by the then communities secretary, Hazel Blears.
Russian bank Alfa bought the £150m debt from Credit Suisse, but has now called it in and started court proceedings which have led to the assets freeze. No-one from Mirax was available to comment. However, credit agency Fitch has withdrawn all ratings on Mirax. Fitch spokesman Peter Fitzpatrick said: "The agency will no longer provide ratings or analytical coverage on this issuer. In Fitch's opinion, Mirax has experienced a payment default on at least one of its debt obligations, failing to fully repay a $265m loan."
Accounts filed by Beetham, in May, 2008, stated that the company needed additional bank loans to develop the London site and they would only be made available if planning permission was granted. In July, 2008, Mirax agreed to take a 50% stake, injecting £112m into the development, a move which also enabled funding brokerage Red Chill Finance to negotiate a £80m bank loan for Beetham.
Beetham has suffered from slow sales of its apartments and the property company at the time was thought to have debts of around £300m. Mr Polonsky stated that, even if Mirax falls, the bank would enable all development sites to finish.
Beetham’s Liverpool schemes include the 40-storey West Tower.
