PARK Hill flats developer Urban Splash has pledged to continue with the £160 million redevelopment despite reporting serious financial problems to the stock market.
Residents are moving into the first phase, overlooking Park Square roundabout, this week.
Project developer, Urban Splash, is trying to arrange ‘new banking facilities’ after its independent auditor warning a failure to do so would cast ‘significant doubt on its ability to continue’.
The company has reported pre-tax losses for 2011/12 of £15.4m, up 64 per cent on the previous year, although turnover was up 16 per cent to £33.7m in the period.
Damian Sanders, of accountant Deloitte, who audited Urban Splash’s accounts, said: “Current cashflow forecasts indicate further facilities are required in the short term while the restructuring is concluded. There is no certainty the necessary funding level will continue to be provided, or that a satisfactory restructuring will be achieved.
“These conditions indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.”
Urban Splash currently has £242.4m of debt including nearly £207m in bank loans.
Tom Bloxham, chairman, said: “Our funders have been very supportive. We have a strong brand, and we expect to conclude our negotiations with the banks in the next few months, putting the group on a sound financial platform.
“We are also in advanced discussions for the next phase of Park Hill which is very encouraging. New residents are due to move into the first 78 refurbished apartments over the coming weeks and our sales and enquires remain above expected levels.”
But Coun Penny Baker, Sheffield Liberal Democrat for housing, said: “This news is extremely worrying, and the implications are concerning. I hope a solution can be found which avoids any more taxpayer money being poured into the project.”
Sheffield Council cabinet member for housing, Coun Harry Harpham, said: “I am confident the Park Hill regeneration project will be completed as planned.”