Early in 2020 the parent company of the Signature Living property group in Liverpool collapsed into administration – now founder Lawrence Kenwright is looking to take back control. Tony McDonough reports
Developer and hotelier Lawrence Kenwright says he has agreed a deal with 95% of unsecured investors to bring the company he founded out of administration.
Liverpool-based Signature Living was founded by married couple Lawrence and Katie Kenwright. The company enjoyed initial success with the opening of the Shankly and 30 James Street hotels in the city centre, as well as a number of other residential schemes.
However, the business started to suffer financial problems in 2019 and both the main hotels were put up for sale with a combined price tag of £57m.
The COVID-19 pandemic compounded Signature’s problems and, in the first half of last year, the main parent company within some 60 different Signature entities, Signature Living Hotels Ltd, collapsed into administration with debts of more than £113m. Administrators said at the time the company was likely to be dissolved.
Mr Kenwright employed the fractional sales model on the number of his schemes, which involved multiple small investors. A group which he claims represents 95% of the unsecured investors, has now agreed a bid to take the parent company out of administration and win back a number of assets.
These are likely to include the Shankly Hotel, the 60 Old Hall Street mixed-use scheme in Liverpool’s commercial district, 30 James Street (now being run by a new operator) and the Coal Exchange, a hotel development in Cardiff.
The investors group is being led by Thomas Scullion, a chartered accountant from Northern Ireland, who first invested in Signature Living in 2018. Concern for his own investments led him to meet with Lawrence Kenwright in January 2020 and verify all raised funds had been used and invested into the business.
Since then they have worked together on restructuring Signature Living under a new umbrella company UK Accommodation Group (UKAG). Mr Scullion is chairman of the company, leading a board of five with Mr Kenwright as chief executive.
UKAG will operate all hotels with the sole purpose of regaining the values that the buildings which formed Signature Living once shared. During 2020, Mr Scullion and fellow UKAG directors re-established regular communication with all investors to discuss a way forward and secure an agreement.
He said: “In signing this agreement, we, the investors, have demonstrated that we are united and willing to allow the company to continue, in order to be repaid in due course. If we are to continue along the administration route all the unsecured money will be gone and the business will be sold off, broken up and liquidated.
“The agreement is also an important collective statement of confidence. I was one of the biggest sceptics but have changed my mind. I have repeatedly returned to why I initially invested and that’s because I believed in the business model Lawrence Kenwright has created.
“I not only came on board to ensure that investors are protected and see a positive return, but also because I believe very strongly in the future of this business. A breakdown in communications with investors will not happen again, which I believe played a big part in creating this situation.
“Further, by establishing UKAG we have brought stronger governance and control and removed some of the weight from Lawrence’s shoulders to allow him to do what he does best namely, to build his business, create projects and drive value.
The proof of that is there to see. In the face of the toughest challenge ever faced by the hospitality sector Signature Living’s development work has not ceased and neither has Lawrence’s drive to restore his position, save his business, protect his staff and those who have invested in him.
“There is some way to go, but more projects will complete this year and I believe Signature Living is again on firm foundations and enjoying an upward trajectory.”
Existing assets still owned by Mr Kenwright and not in administration include the Dixie Dean Hotel, opposite the Shankly in Victoria Street, Alma De Cuba restaurant and bar, the Arthouse Hotel, Kingsway House, a residential scheme in Tithebarn Street, Rainhill Hall Hotel and a recently-completed residential scheme in a former college in West Derby.
Mr Kenwright added: “Signature Living is continuing to navigate its way through the toughest time it has ever faced, and this is most welcome and morale-boosting news.
“I am extremely grateful for the support of Thomas Scullion, the UKAG board and all the investors who have signed the agreement to help them realise the return on their investment.
I am hopeful that further positive steps can now be made to bring the company out of administration. There are still some issues at various sites which we will put right but this is the start of that process and we are putting in the building blocks now of doing that.”