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Plans to turn the celebrated former Midland Bank building, whose vaults starred as Fort Knox in the 1964 Bond film Goldfinger, into London's first six-star hotel have been thrown into disarray after the owner defaulted on a £72 million loan.
Poultry Development, set up by Russia's former deputy foreign minister Vladimir Chernukhin, paid £72 million for the prime site in the heart of the City in 2006. The Grade I-listed building at 27-35 Poultry, designed by architect Edward Lutyens in the 1920s, stands opposite the Bank of England.
Accountants Grant Thornton confirmed they have been appointed as administrators after Poultry Development missed a 26 January deadline to repay part of the debt. "We will be meeting the security trustee and reviewing our options over the next few days," said a Grant Thornton spokesman, who declined to say whether the loans could be restructured or the site sold.
Poultry Development's senior loan, worth £55 million, was packaged by Credit Suisse into mortgage-backed bonds. The Swiss bank then sold those bonds through a special-purpose company, Titan Europe 2007-3.
It said in a statement to the Irish Stock Exchange: "On 29 January, 2009, written confirmation was received from the borrower confirming that they were unable to satisfy the demand for repayment of the loan and consenting to the appointment of Grant Thornton as administrators of the company."
A spokesman for Credit Suisse declined to comment. Rubicon Asset Management, based in Australia, owns a further £18million in junior loans on the property. Rubicon said it "does not expect to receive further interest income in the foreseeable future" because of the default.
Poultry Development bought the site in October 2006 from entrepreneur Paul Kemsley, former vice-chairman of Tottenham Hotspur, and HBOS bank.Kemsley acquired the site in May 2006 for about £40million and "flipped" it for an estimated £30million profit.
Law firm Mishcon de Reya acted on the 2006 purchase, and boasts on its website how it "exchanged contracts from a standing start in an impressive 12 hours".
Experts say 27-35 Poultry could be worth between £40million and £45million in the current market.
