Omni Capital has provided a £30m debt facility to a healthcare developer owned by Lawrence Tomlinson, the government’s former entrepreneur in residence and fierce critic of Royal Bank of Scotland.
The debt business, owned by Christian Candy’s CPC Group, has issued a four-and-a-half year loan to LNT Care Developments, a specialist developer of care homes chaired and owned by Tomlinson (pictured). The loan will be used to expand the company’s development pipeline within the UK.
It was arranged by Omni Capital Structured Finance, the lender’s division for complex development projects. Omni is one of a growing number of specialist short-term and development finance specialists that focus on higher-yielding opportunities, with traditional lending banks still relatively wary of lending on developments.
Tomlinson said: “Omni Capital is a perfect partner for us. As property experts, they understand the nature of our construction business, thus streamlining the decision-making process. They have a clear appetite to provide creative structured solutions which fill the gap left by the continued absence of mainstream bank lending.”
Dan Smith, head of structured finance at Omni and former managing director at Eurohypo, said: “We were impressed by LNT’s proposition, which was based on quality and deliverability. Whilst we do not routinely cater to the care homes market, this demonstrates our appetite for expansion into new areas when circumstances are right. LNT is a market leader, and their unique experience as both a care provider and developer made them stand out from the rest of the industry.”
“Their homes are designed with a true understanding of the importance of the built environment in helping deliver quality care. Coupled with an ability to identify a development site based on demographic need and local under-provision, their proposition will ensure long-term demand for their properties.”
As “entrepreneur in residence” Tomlinson was commissioned by UK business secretary Vince Cable, to investigate banks’ treatment of small business customers. Tomlinson’s report, published in November 2013, was highly critical of RBS’s global restructuring group (GRG), and in particular its West Register arm which bought assets that the bank had foreclosed on and was subsequently selling in the open market. It did this in order to put in place a reserve price and put a limit on potential losses.
Since then an investigation by law firm Clifford Chance, which was commissioned by the bank but labelled as independent, gave RBS a clean bill of health last April.
However, RBS then decided to wind-down West Register and GRG; it also emerged that Tomlinson had been told to find alternative financing arrangements for his business interests by the bank in June 2013, prior to the publication of the report, due to his “longstanding dissatisfaction”. RBS initially told Tomlinson his personal mortgage would also have to be transferred but later backed down.
The Financial Conduct Authority is undertaking its own investigation into GRG which is expected early to mid-2015, according to the regulator.
LNT was advised by Hervines Capital on the deal.