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Quarry will not be affected by parent company's bankruptcy

By This is Somerset  |  Posted: January 12, 2010

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DEPSITE its parent has collapsed owing hundreds of millions of pounds, the company that owns Dulcote Quarry is to keep trading.

The quarry is owned by a subsidiary of major Scottish property Kilmartin Holdings, which has gone into administration.

But PricewaterhouseCoopers (PwC), which has taken control of the Kilmartin and its assets, says that Dulcote Quarry is owned by a solvent subsidiary company which is still in business.

The future sale and development of the site will not be affected, according to agents working for the administrators.

Kilmartin Holdings was one of Scotland's largest property developers, and has been taken into administration after months of negotiations failed to save the company.

A management buyout saw another of the company's subsidiaries, the Kilbride group which bought Dulcote Quarry in 2007, reformed as a separate company in October 2009. But the new company did not take on the Dulcote Quarry project. Kilmartin had been heavily supported by HBOS, the bank which was rescued by Lloyds following the financial crisis.

The company is a major player in the UK property market, with the Dulcote quarry project for an environmentally friendly business park one of 20 around the country it owned.

Kilmartin borrowed £500 million from HBOS but has suffered from the slump in the property market.

The company's assets are valued at £300m, suggesting Lloyds could lose around £200m

PwC's Graham Frost, who was appointed as joint receiver, said that Kilmartin's directors had tried unsuccessfully to refinance the group.

"After discussions with the existing lenders, the decision has been taken to place these holding companies into receivership or administration," said Mr Frost.

"Our immediate priority will be to review the existing position, explore options and to develop an effective strategy for the businesses. During this process, we will work with all stakeholders and employees and would also like to reassure the existing tenants of the properties that this process will have minimal impact on them," Frost added.

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