The Daily Telegraph - Business
Peer-to-peer lenders face huge losses after bet on Yorkshire coal mine
LEADING peer-to-peer companies are facing heavy losses after lending to business financiers who ploughed cash into a Yorkshire coal mine.
ArchOver and Assetz Capital provided millions in loans to UK Exim Finance and UK Exim respectively, but appointed administrators over the borrowers in 2018. UK Exim was moved into dissolution this week, and administrators said Assetz Capital had received £1 out of the £2.5m owed.
ArchOver was owed £4.74m by UK Exim Finance and administrators warned in July it would suffer a “substantial shortfall”. ArchOver told The Daily Telegraph this week it was confident of recovering about 80pc.
UK Exim and UK Exim Finance, in turn, provided funding for other businesses. Both were owned and codirected by Mark Runiewicz, a trade and export finance figure who has given evidence on the topic to the House of Lords. He cut his stake in UK Exim to 49pc in August 2018.
Most of UK Exim’s loan book is made up of £3.2m owed by Packaged Water, a company part-owned by Mr Runiewicz’s business partner Mary McErlain and of which he is a co-director.
In 2017, Packaged Water had paid £4.25m to buy European Coal Products, owner of the Eckington coal mine near Sheffield, out of administration. ECP owed £4.25m to UK Exim when it collapsed. This was paid back through the Packaged Water deal.
Records show that Funding Your Business, a company owned by Mr Runiewicz, had taken a majority stake in ECP in 2015.
UK Exim Finance got into financial difficulties “principally due to bad debts and the failure of some clients to repay their debts”, administrators said in 2018. Its lending included £2m to UK Exim.
Ian Anderson, co-founder of ArchOver, said: “ArchOver has continually pursued this case and is currently confident it will recover in the range of 80pc of the capital.”
A spokesman for Assetz Capital said: “We do not comment on individual loans. Since 2017 we have been exclusively a property-secured lender.”
Mr Runiewicz did not respond to a request for comment.