Carvill Group owed banks £83m when it went bust

The Carvill Group was behind a planned redevelopment of the Sirocco Works site in Belfast

One of Northern Ireland's leading property firms owed banks around £83m when it was placed into administration in May.

The details are contained in a report by the administrators of the Carvill Group.

The report said the Ulster Bank and Northern Bank can expect "a significant shortfall" because of the fall in the value of the firm's assets.

Smaller unsecured creditors are unlikely to get any of what they are owed.

They are owed a total of £2.3m.

They include a County Antrim plastering firm owed £80,000 and a Belfast architect who is owed £94,000. The transport company Translink is owed £118,000.

The administrator said Carvill had seen "unprecedented" growth between 1995 and 2007, but that the business came under increasing pressure from 2007 when the property price bubble burst.

The collapse in house sales reduced Carvill's income while interest payments on the firm's loans continued to mount.

Cost cutting

The administrator singled out the cost of the Sirocco site in Belfast as being particularly significant. The firm bought it in 2006 for a reported £40m.

The report laid out how the Carvill directors fought to cut costs through redundancies and three rounds of pay cuts.

However, in the months before the administration the business was operating at the limit of its £10m Northern Bank overdraft with no prospect of the limit being increased.

Northern Bank had also provided the loans for the Embankment apartment development at Stranmillis in south Belfast and a small site in the Donegall Road area.

Ulster Bank funded the Sirocco deal and the development of the Woodbrook 'eco village' near Lisburn.

Carvill also had other significant properties in Dundonald, Dunmurry and Portadown.