The Daily Telegraph - Business

Peer-to-peer lenders face huge losses af­ter bet on York­shire coal mine

- By Rachel Mil­lard

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.

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