Inland ZDP PLC

Update on Administration of Inland Homes PLC

On 27 September 2023 Inland Homes PLC ("Inland") announced its intention to appoint Administrators. 

This announcement contains a summary of the background and security arrangements applicable to Inland ZDP PLC ("ZDPCo"), the present situation and expected next steps.

Background and security arrangements

Inland is the holding company of ZDPCo which was formed to issue zero dividend shares ("ZDP Shares") and lend the proceeds to Inland for use in its property development and housebuilding business.  The Articles of ZDPCo provide for it to be liquidated on 10 April 2024 and for the payment of a Final Capital Entitlement of 201.4p to the holder of each ZDP Share (the "ZDP Shareholders") at that time.

The arrangements between Inland and ZDPCo include a Contribution Agreement making Inland responsible for ZDPCo's costs and expenses and for the payment of the Final Capital Entitlement, together with Loan Notes and security documentation under which Inland is committed to providing first charge security over "Pledged Assets" with a book value of 120% of the accrued value of the ZDP Shares (less any cash held in a pledged bank account).  The book values used for the security cover covenant have historically been on a 'going concern' basis.  Consequently they do not reflect the value obtainable in a forced sale which could be lower. 

The directors of ZDPCo are also directors of other companies in the Inland group.  The prospective Administrator and Inland have agreed to advance funds to cover the costs of the provision of independent legal advice to ZDPCo and the ZDPCo directors intend to act in accordance with that advice in fulfilling their duties to ZDPCo and its stakeholders.

The present situation

The accrued capital entitlement due to ZDP Shareholders as at 30 September 2023 is £35.3m.  The present Pledged Assets, comprise:

•        a loan by Inland Limited to Cheshunt Lakeside Developments Ltd ("CLDL").  CLDL is a joint venture company which owns a substantial consented site.  CLDL has secured borrowings which rank in priority to the unsecured loan due to Inland Ltd and other unsecured creditors.  The loan to Inland Limited, which has been pledged to ZDPCo, ranks ahead of the equity interests in CLDL;

·        modular housing units owned by Hugg Homes Ltd charged directly in favour of ZDPCo; and

•          a loan by Inland Limited to High Wycombe Developments Ltd, a company owning three commercial units.  This loan is unsecured but there are no prior ranking charges over the property assets.  There are certain amounts due to unsecured creditors ranking pari passu with the pledged loan from Inland.

Next steps

When the Administrators are appointed to Inland (and to various of its subsidiaries), they will work with the directors and other parties to determine the liabilities of relevant Inland companies.  Working with relevant parties, including secured lenders such as ZDPCo, a realisation process is then expected to be conducted. 

The proposed Administrators have already received expressions of interest in various assets of the Inland group.  However, until the realisation process is underway it is not possible to predict the extent of recoveries of amounts owed to ZDPCo or the timing thereof.

Further information:

Neither Inland nor ZDPCo is able to respond to individual enquiries.  Further announcements will be made in due course.  These will incorporate information relevant to ZDPCo in the periodic updates published by the Administrators.

The LEI of Inland ZDP PLC is 2138005ARQZZ34Y2TH34.

The information contained in this Announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (Regulation 596/2014), as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon release, this information is considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of Inland ZDP plc is Jolyon Harrison, Director.