Homes England is set to get only £126,423 from the £69m it loaned to Ilke Homes – even though liquidations and administration processes have generated £5.1m earmarked for it.
Insolvency specialists overseeing processes for three Ilke Homes companies have managed to recoup the sum but a legal agreement means almost none of it is being returned to taxpayer-funded Homes England.
Offsite specialist Ilke Homes went under in June 2023 owing £68.8m to the government housing accelerator.
A new and final report from liquidator Alix Partners on Ilke Homes Ltd noted that while Homes England was the only secured creditor of the Ilke Homes companies, it will not receive any money from Ilke Homes Ltd .
It will instead go to three other companies – KM Modular Housing, CF ILK Investments LP and Luxembourg-registered Whitehorse Holdings – which loaned £5m to Ilke as it struggled for finance in May 2023, just weeks before its collapse.
The deal, called a subordination deed, means that the companies take rank ahead of Homes England for the first £5m recovered, despite not being named as creditors and Homes England appearing as though it was first in line for payments.
Some £128,423 has been recouped through Ilke Homes Ltd.
Two other Ilke companies – Ilke Homes Land Ltd and Ilke Homes Holdings – are still in administration.
The administration of Ilke Homes Land Ltd has raised £4.9m earmarked for Homes England and £98,000 has become available via Ilke Homes Land Ltd.
It had previously been thought that Homes England might be in line to recover £4.3m from the companies.
But while the figure has been revised upwards, it will mostly not be recouped by the taxpayer.
Cash available through the administration and liquidation processes was thought to have dropped due to the theft of plant and equipment from one of Ilke’s factories and problems selling completed modules.
Administrators subsequently sold land in Milton Keynes and Birmingham for £11m and £1m respectively.
In August 2024, the liquidators negotiated an insurance settlement of £161,603 over the equipment lost in the factory break-in.
The total amounts from the companies in administration could change, but currently total £5.1m across the three entities with Homes England due to be paid approximately £126,423 after the other companies are repaid.
Ilke companies owed £308.5m to unsecured creditors, with just £827,270 expected to be returned.
In April 2024, Peter Denton, the then chief executive of Homes England, defended the body’s investment in Ilke during an interview with Construction News.
He said: “We made an investment in Ilke Homes in good faith, because we were doing our job, which is to intervene when the market isn’t providing.
“We were completely aware of the risk levels we were taking on. It’s not that we want to lose money, but it’s expected that we will lose money, because that’s our job – to take risks that the market won’t take.”