It was said rather cruelly last weekend that former HBOS real estate boss Peter Cummings "would lend to anyone, provided they were wearing a kilt and had a glass of whisky in their hand". John Kennedy, the affable head of Kenmore, favoured tartan trews: A style choice clearly Scottish enough for Cummings, who put £700m in debt and equity into the collection of funds and companies which collapsed yesterday.
Today's Times has by far the best account of the demise of the business that Kennedy nearly sold for £300m to Australian real estate group Mirvac in late 2007. A year later, in one of his last deals at HBOS, Peter Cummings helped raise £67m for Kenmore - the second recapitalisation in 2008. The Times says the FSA is investigating HBOS to see if the risk of further write-downs were adequately flagged up.
A tie up with Saudi bank, Watan Investments was announced just before the second capital raising exercise. To no avail. Now 19 separate businesses are in administration and a couple of funds are in receivership. It is not hard to see why. Kenmore was into everything from a Caravan Park on Loch Tay to shed-building in Dubai. With just 50 staff, the business was trying to manage £2b of assets in nine European funds, a scattering of direct assets across the North of England, and even a development adjacent Bond Street tube in London.
But why has Lloyds Banking Group pulled the plug now? For the usual reason: the most dangerous moment for struggling companies is when the economy is pulling out of the dive. At that point the bankers begin to believe they can get more from selling the assets than they can from letting the management struggle on. Kenmore won't be the last to suffer this fate. The company's administration is not unrelated to yesterday's post suggesting that the banks are going speed up divestment next year.
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