Ilke collapsed into administration with debts of £319m

Collapsed modular housebuilder Ilke Homes Ltd went under in July with net debts of more than £319m, a statement of affairs released by its administrators has revealed.

According to the statement, published on Companies House, the bulk of the debt comes from £227m owed to “intercompany creditors”, money which is ultimately owed in equity to the firm’s investors, who have been publicised as comprising TDR Capital, Sun Capital and Fortress Investment Group, among others.

In addition, the statement of affairs from administrators Alix Partners makes clear Ilke owes just under £68.2m to publicly-funded housing quango Homes England, which was a major backer of the business, supporting it in funding rounds in 2019 and again in 2021.

The statement of affairs implies that Homes England may get as little as £200,000 back from its investment, despite the fact the money is secured against Ilke-owned assets.

Further to the Homes England debt, the collapsed modular housebuilder is listed as owing £17.1m to trade creditors, £2.19m to HMRC, £5.56m to other creditors and £724,000 to staff.

The statement lists the book value of Ilke’s assets at the time of administration at £71.8m, but that it is currently estimated that the administration will realise just a little over £1m from the sale of the assets.

But Alix Partners said that because the administration was still proceeding, in many areas no value had so far been assigned to assets – implying more might ultimately be realised.

Ilke’s book assets included £12.4m of finished homes, which the administrator has not so far put a value on.

The statement of affairs said the total current net debt was £319m. Regarding the £226m owed to “intercompany creditors”, it said this was “inclusive of accumulated losses suffered by equity investors which are not representative of the external debt obligations of the group”.

>> See also: What went wrong for Ilke Homes?

Ilke collapsed into administration in July despite securing £100m in funding from Fortress, TDR and Sun as recently as December last year. This “transformational” sum was to expand production at the firm to 4,000 homes per year and create 1,000 extra jobs.

However, investors pulled the plug on production in June due to fears over the rate of cash burn, prompting a desperate and ultimately unsuccessful scramble to find a buyer.

Ilke’s collapse comes after the closure of L&G Modular in May, and the Homes England-backed joint venture between Urban Splash and Sekisui last year.

Earlier this week law firm Aticus Law said that 600 former Ilke employees had joined in legal action against the company over the way the redundancy process was managed.

Claimants are looking to secure a Protective Award claim against the company, which means they can receive up to eight weeks’ worth of pay in compensation with a cap of £643 per week.

Homes England has been contacted for comment.