Solent sold 'for tenth of price'
Solent Mortgage Services was sold for a tenth of the price of what it would have fetched six months ago, its administrator has claimed.
Administrator MCR said the current economic environment had meant the firm, which was sold as a going concern to the Phoenix Group for an undisclosed sum on 24 October, only received two tabled offers.
Kevin Buckett, administration manager of MCR, said while there had been interest for different parts of the business he was always aiming to sell the business as a whole.
He said: "Only two groups provided firm offers for the business as a going concern and there were a number of offers in respect of people just looking to assist taking over the pipeline and working the business out."
Phoenix will be retaining the name Solent Mortgage Services and has appointed Ian Balfour, formerly sales and marketing director of Solent, as chief executive, Mr Buckett said.
The firm will operate from Fareham and will retain five staff.
Despite the current down turn Mr Buckett said he was expecting more interest in the firm due to the strength of the Solent brand and its IT infrastructure.
He said: "I suppose the issue for us was what sort of value we would actually get. To a degree I was slightly disappointed on the basis of the level of IT investment that there has been and the systems that were in place.
"But in the current climate you are going to have a limited number of buyers so you struggle to create market tension. People realise what they can or cannot pay and what other people are willing to pay as well and there is a feeling of what you are ever going to realise for that sort business at the current time. Six months ago the price would have probably been tenfold."
Advisers who had submitted business through Solent since MCR's appointment will receive their procuration fees.
Mr Buckett said he made a number of payments over the last couple of weeks but the money had been rather slow in coming in from lenders.
He said: "I got another large tranche of money in from one of the lenders this week which allow me to make another probably 30 odd payments to brokers so it has been successful in that respect."
Darren Pescod, managing director of Cambridgeshire-based adviser The Mortgage Broker, said the IT investment made by Solent would not be the sole reason for Pheonix buying it.
He said: "Obviously the buyers see something within the business which will develop them a lot and having an IT infrastucture does help on the back of that but they must see a future of the business for it to be an attractive proposition."
