Specialist commercial finance company, Davenham Group PLC, has announced it is to appoint administrators after the banking syndicate, led by Royal Bank of Scotland, said it would not renew its banking facility. As such the shares were suspended.
The directors are able to file a notice to appoint administrators at the court and this gives them a 10 day moratorium during which period creditors cannot launch legal action such as winding up petitions
The lender has seen major write-downs in the value of its loans made against properties since the onset of the financial crisis.
In March, Davenham said that the size of its loan book had reduced to £65.1m by the end of 2010, although it still owed the banking syndicate £86.3m.
Specialist commercial finance companies are now well placed to exploit business opportunities where the other banks fear to tread. However, if asset values suddenly fall or they have been injudicious in their loans then they can be exposed.