Delayed Repayments And £150M Owed: Companies Related To £1B Property Firm Collapse
A group of companies related to a UK regional investor and developer with a portfolio of more than £1B have gone into administration and liquidation, leaving small-time investors potentially owed hundreds of millions of pounds.
Administrators from MHA were appointed to four Godwin Capital companies at the end of last week. Another Godwin Capital company was placed into administration this week, and another six companies are set to be placed into liquidation, Bisnow can reveal. An automatic response to a Godwin Capital email address revealed the liquidations.
Godwin Capital raised money from individual investors, and Birmingham-based Godwin Group companies used that money to buy and build commercial and residential properties across the UK.
One of the companies in administration, Godwin Capital No. 8 Ltd, had creditors of £163M as of March 2024, the company's last available accounts show. Of that amount, £150M was secured lending.
Financial advisers in the UK, U.S. and United Arab Emirates would sell loan notes to individual investors with fixed-interest payments ranging from 8%-12%. The loan notes were secured against Godwin Group assets, essentially making those buying the bonds lenders to the company.
The loan notes had a typical maturity of two years, with minimum investments ranging from £5K to £19K. A security trustee managed the investments on behalf of bondholders.
A term sheet for a £50M loan-note issuance for Godwin Capital No. 8 contains details of properties that are in the Godwin Group portfolio, though it doesn't specify exactly which of them the loan notes are secured against.
The properties range from schemes in planning, including the 201-unit Landmark build-to-rent scheme in Derby, to completed schemes like a supermarket let to retailer Lidl in Birmingham.
The term sheet described Godwin as having a pipeline of more than 3M SF with a value of more than £1B, including 2,800 residential units.
Investors had the choice of receiving regular interest payments or rolling up the interest and receiving it when they got their initial capital back, thereby receiving a higher return.
But last year, Godwin contacted investors in Godwin Capital No. 8 and asked if the payment of interest could be delayed and the maturity date of the loan pushed out by 12 months.
An email sent to investors in September 2024 said that while the company had 30 profitable sites across the UK, revenues had been slower to grow than the company had expected due to economic headwinds like rising interest rates.
The email also said that Godwin was working with three external advisers to raise capital for its three separate operating divisions and had gained “good early traction” on the process.
The loan note maturity date was being extended to allow new developments to be completed and the interest rolled up to “ease cashflow pressure,” the email said.
More than 90% of investors voted to extend the maturity in a December 2024 vote.
The security trustee moved to put the Godwin Capital companies in administration, Green Street News reported earlier this week. Those companies are: Godwin Capital No. 6 Ltd, Godwin Capital No. 8 Ltd, Godwin Capital No. 20 Ltd, Godwin Capital No. 21 Ltd and GC No. 24 Ltd.
An automated email response outlined the companies going into liquidation, adding that Godwin directors had engaged advisers to help them place other companies into liquidation “as soon as practically possible.” According to the email, they include Godwin Capital No. 3 Ltd, Newhall Capital Ltd, Godwin BTR Services Ltd, Godwin CS No. 1 Ltd, Godwin Capital No. 1 Ltd and Godwin Development Services Ltd.
“The proposed liquidators will write to creditors of these companies in due course (within next 1-2 weeks),” the email says.
Godwin was founded in 2003 by brothers Stephen and Stuart Pratt. Andrew Mitchell and Richard Johnston are also directors, and the term sheet for one bond issuance said the company has 45 staff.
Godwin’s website was not available as of Wednesday morning, and attempts to contact the company via several public email addresses did not produce a response.
In a statement, an MHA spokeswoman said Steven Illes and Andrew Duncan had been appointed joint administrators of Godwin Capital No. 6, No. 8, No. 20 and No. 21 Ltd.
“At this time it is too early to advise on the possible outcomes to the investors/creditors but our enquiries with the company’s management and other stakeholders is ongoing,” she said. “We will be issuing our proposals to creditors in the coming weeks which will outline the position and the strategy for the administrations going forward.”
