The firm behind the multi-million pound restoration of Taymouth Castle is facing serious cash flow problems, throwing the project into jeopardy.
Rumours have surrounded the future of the ambitious £74m development for several months and the true extent of the problems have now been exclusively revealed to The Courier.
The owners of the A-listed building, Meteor Property Fund, have experienced a major setback after one of their main investors fell into administration.
A spokesman for Taymouth Estate said they had been committed to a ”significant” further investment in converting the building to a luxury hotel and that this will no longer be forthcoming.
”Clearly the fund could not foresee the demise of this major investor and the project has unfortunately been affected by the current harsh economic climate in which it is extremely difficult to attract new funding, even at low debt to equity ratios,” he said.
”The main contractor employed on the construction contracts on the Taymouth Castle Estate was Farnham Developments Limited (FDL). However, because the fund did not receive significant anticipated investment, it was, in turn, unable to make payments to FDL for the most recent elements of work it has completed at Taymouth Castle.”
As a result of Meteor losing its main investor, FDL has been plunged into debt estimated to be around £1.57m. The firms employed by FDL to undertake the restoration of Taymouth have also lost out as a result.
Among those worst affected are Aberfeldy-based architect McKenzie Strickland, which is owed £109,832; Pitlochry groundworks firm RA Laird, owed £39,585; Mackays Decorators of Perth, owed £35,000 and Easy Heat Systems of Perth, owned £50,300.
The spokesman added: ”All parties involved in the project have been working together to try to resolve the current situation. It had been hoped that FDL could apply for a CVA (Company Voluntary Arrangement), which would have provided the time and protection it needed to resolve its current issues.”
Continued…
”After taking professional advice, it was unfortunately decided by the director of FDL that this course was not appropriate and we have now been advised that FDL is to be placed into administration.
”The fund has significant property assets, the realisation of which should be more than sufficient to meet its obligations to FDL in due course and the fund is in discussion with the directors of FDL and their advisers as to the way forward to achieve this.”
Prior to losing its main investor, Meteor Property Fund had ploughed £20m into the preliminary stages of the development. This saw the restoration of eight of Taymouth Castle’s principal rooms, including the library used by Queen Victoria as she honeymooned there in 1842.
A handful of residences within the estate had also been completed, with these set to be sold on to wealthy holidaymakers.
Over the last few months, however, progress has been slow, with work on the structure and layout of the bedrooms and suites being delayed until a hotel operator has been confirmed.
Taymouth Estate has made it clear that the project is not the cause of the fund’s current financial situation and that they ”remain committed” to the restoration.
The spokesman continued: ”We are working hard to secure new investment into the fund and, while availability of financing for this type of project is restricted at present, we are currently in advanced negotiations with potential investors to provide additional investment to take the development forward, as well as realising sales on other projects to enable FDL to be paid and, in turn, satisfy their creditors.
”The fund regrets the situation which has arisen, particularly as it has affected those within the local community.”
Plans to transform the former seat of the Campbells of Breadalbane into a six-star hotel are not new, but have proved something of a white elephant for developers.
Previous owners Taymouth Group Ltd went into administration in 2009, four years after starting work on their own blueprint for a luxury getaway. They only managed to replace hundreds of windows and make the building watertight before running into difficulties.
Meteor’s efforts have come closest to breathing new life into the castle, carrying out impressive improvements over the last 12 months.