Scottish housebuilder Stewart Milne Group has fallen into administration, with 217 of the workforce of more than 300 made redundant.

Founder Stewart Milne declared he was “devastated” by the “unexpected outcome” of a “sale process”, declaring that lender Lloyds Banking Group had not accepted either of two bids and had withdrawn funding. 

One of the bids is believed to have come from Mr Milne.

Lloyds Banking Group said that it had provided "multiple maturity extensions to the borrowing"  during "several years of support and forbearance".

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Insolvency practitioners from Teneo Financial Advisory were appointed as joint administrators of Stewart Milne Group Limited and six of its subsidiary entities today.

The administrators said: “Like many in the housebuilding sector, Stewart Milne has faced significant challenges over the last few years, with economic uncertainty due to rising interest rates, increasing cost pressure and an associated reduction in consumer confidence.”

They added: “The directors have explored multiple options to secure the future of the business, including running sale processes, most recently from May 2023. Unfortunately, this did not result in a transaction and other options to restructure the group were ultimately not viable. The directors therefore took the difficult decision to place certain group companies into administration, including each of the Stewart Milne companies that operate active development sites in Scotland.”

Mr Milne, former chairman of Aberdeen Football Club, said: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, sub-contractors, suppliers and customers.

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“Stewart Milne Group was up for sale and, following significant interest, two bids were submitted. The bank has not accepted either bid and withdrawn its funding, which left the directors with no option but to appoint administrators."

He added: “I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it. I believe one of the bids could have delivered a comparable financial return to administration and, crucially, allowed the business to continue to operate, safeguarding hundreds of jobs and protecting livelihoods.”

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The administrators said: “Following their appointment, the joint administrators will focus on realising the group’s assets and pursuing an orderly wind down of the business, retaining 54 employees to assist with managing this process. An additional 58 employees aligned with the operations of Stewart Milne Homes North West England (Developments) Limited have been retained.”

They added: “Regretfully, this means that 217 roles were made redundant shortly following the administrators’ appointment.”

A spokesperson for Lloyds Banking Group said: "When a company experiences financial difficulties, we will always try to find a solution that places the business onto a sounder financial footing without the need for any insolvency process.

"Unfortunately, despite several years of support and forbearance, including multiple maturity extensions to the borrowing, this has not been possible in this instance. We will now work with the administrators, as they consider the best options for the business."

Adele MacLeod, of Teneo, said: “The downturn in the UK housing market combined with an extensive sales process not resulting in any viable offers has ultimately led to the need for the directors to place Stewart Milne Group Limited and some of its subsidiaries into administration, regretfully with some immediate redundancies.

"We continue to assess all the options in respect of the group's Scottish development sites and encourage any party with an interest to get in touch.”

The administrators said: "The administrators are communicating with all employees affected and working closely with the Redundancy Payments Service to support employees in recovering any statutory entitlements to which they may be entitled."

The six subsidiary entities to which the administrators have been appointed are Stewart Milne Homes Central Scotland Limited, Stewart Milne Homes Central Scotland (Developments) Limited, Stewart Milne Homes (Arbroath) Limited, Stewart Milne Homes (Auchterarder) Limited, Stewart Milne Homes (Kirkston) Limited and Stewart Milne Homes North West England Limited.

In 2021, Stewart Milne Group sold its timber systems business to Fife-based timber company Donaldson Group.