Who is Promontoria?
If your company, LLP or partnership once borrowed money from Ulster Bank, Allied Irish Bank, Yorkshire Bank, Clydesdale Bank or Lloyds, these banks and other institutions sold much of their debt books, when there was any breach of the loan conditions, to the so-called Vulture funds called Promontoria.
We are aware of Promontoria (Henrico), Promontoria Eagle, Promontoria Vantage, Promontoria (Thames), Promontoria Hampton (1) and Promontoria Hampton (2).
We have been advising clients recently where aggressive demands for repayment in full have been made to the directors, designated members or partners. This can be distressing for you when you are working hard to drive your business on. The legal sector is particularly prone to this right now. In 2018 we refinanced a law firm who stood to lose their homes. Please see this case study.
These Promontoria funds are Dutch or Dublin registered financial institutions affiliated to US investor Cerberus Capital Management. The institutions were in the news because they started to aggressively pursue the debtors for breach of conditions. This does not necessarily mean the borrowers were behind on their payments but were in breach of loan to value limits (LTV).
Do you need help to deal with this? Call KSA Group now on 020 7887 2667
What are the options ;
- Pay the debt back by re-banking, or refinancing it through our sister business Company Funding Options which is a FCA regulated and authorised corporate finance broker.
- Challenge the debt demand – it is almost certain that Promontoria bought the debt for 20p in the £1. So it may be worth looking at making a discounted debt repayment offer.
- To support this ensure you have a business, goodwill and insolvency valuation done by a reputable Chartered Surveyor who might be able to challenge a valuation made by the bank's own valuers.
- If you are having any problems meeting payments, then KSA experts might be able to help by organising a time to pay arrangement (TTP) with your other unsecured creditors to free up some working capital.
- If the company cannot pay unsecured creditors over a 6-12 month period, it might be best to consider going into a company voluntary arrangement or CVA. While this is an insolvency procedure, Promontoria is only interested in the secured debt and would probably not vote in the CVA process. This may release working capital and future profitability to repay the secured debts over time. At the very least it would highlight the current inability to repay in full.
- Most importantly, if Promontoria funds are threatening to put the company into administration or repossess the property, there has to have been a default of the loan conditions and the company, LLP or partnership needs to be insolvent. If you don't think there has been a default, you must contact KSA or a solicitor urgently.
- Do bear in mind though that the debts were only sold on as they were in default at some point. The question is, are they still in default? This is a matter for you to establish. We can recommend good specialist solicitors who have an excellent track record on taking on the financial institutions where there has been mis-selling.
Q: What if we provided personal guarantees to AIB, Ulster Bank, Clydesdale Bank or Yorkshire Bank and this debt has been sold on?
As licensed insolvency practitioners KSA is able to advise your business and you with regards to all options; including individual voluntary arrangements, debt restructuring, raising money on your assets to repay debt and avoid bankruptcy etc.
Finally don’t bury your head talk to KSA experts today on 020 7887 2667