‘Grand Designs curse’ hits Mccloud’s firms
In a turn of events worthy of his TV show, eco-homes businesses linked to the presenter are going bust
IN A case of life imitating art, companies linked to Grand Designs presenter Kevin Mccloud have collapsed after hitting financial problems – leaving small investors facing heavy losses.
Mr Mccloud’s television series has been on air since 1999, following people as they design and build their dream homes, using novel materials and ground-breaking architecture, often in unusual locations.
However, the shows frequently highlight projects hitting the rocks as budgets spiral out of control, technical problems crop up and delays push back moving-in dates.
Now, it seems what some see as the “curse of Grand Designs” has come home to roost.
KPMG has been appointed to liquidate three companies linked to Mr Mccloud that aimed to deliver the kind of eco-friendly properties that featured on Grand Designs.
Deriving their names from the acronym of “happiness, architecture, beauty”, HAB Land and HAB Land Finance, in which the presenter was part-owner when they were set up and director until resigning in February, have become insolvent.
BAH Restructuring, a related business which Mr Mccloud was not a director of but in which he held shares, has also gone bust.
According to administrators, HAB Land suffered similar issues to those common on the television series, facing “higher than anticipated design and project management costs”, along with delays.
HAB Land was set up five years ago to buy land to build homes in Oxford and Winchester. HAB Land Finance followed soon after to raise money to fund it, using mini-bonds sold to small investors keen to buy into the Grand Designs dream.
However, in March, after what liquidators called a “period of difficult trading”, HAB Land Finance hit problems and said it would not be able to repay the bonds.
Investors – who put in an average of £8,000 each and some of whom have been told they could face a 97 per cent loss on their investment – turned down alternative repayment plans offered by directors. This led to HAB Land Finance becoming insolvent, with creditors voting on Tuesday to put the business into liquidation.
Liquidator James Bennett said: “Directors reported that higher than anticipated design and project management costs, coupled with delays to the delivery of the sites, resulted in the companies experiencing significant liquidity issues.
“After being unable to raise further finance or renegotiate existing liabilities, the directors took the difficult decision to instigate liquidation proceedings.”
KPMG said that the two building projects in Oxford and Winchester were not affected as they were controlled by subsidiary companies. The directors of these companies are examining how construction work on the projects can be completed.
It is not yet known how much bondholders will receive following the liquidation, with KPMG only just beginning to unravel the companies’ accounts.
It is thought that with bondholders having been previously warned they could be almost entirely wiped out, the potential to salvage much from the businesses looks remote.