BHS Property Deals Exposed at Green Hearing

The BHS credit valuation adjustment (CVA) has been branded a “wasted opportunity” by retail billionaire Sir Philip Green.

Green, during his six hour long parliamentary hearing, claimed that former owner of the company Dominic Chappell has missed out on up to £100 million of potential property sales and was too slow to arrange a CVA which ultimately spurned the chance to turn the organisation around.

Further revelations were revealed on convoluted property deals, among which was the sale of Marylebone House and North West House, NW1, to Chappell. When he faced the MPs committee last week, Chappell was asked about the deals.

At first it was intended that BHS’s HQ, Marylebone House, which was owned by offshore company Wilton Equity (controlled by Lady Tina Green), was to be sold for £35 million to Chappell. This was below the market value which meant that a profit could be made from flipping the property.

In order to pay for the asset, Chappell intended to take a £35 million loan from the Dellal family before selling it to a company controlled by Dellal for £43 million. However, Green had a change of heart and it was instead sold to Arcadia, his own firm, for £53 million.

He commented that all cash made from the sale of BHS and leasebacks during his time in charge were invested back into the firm, adding that after the completion of the BHS sale and leaseback deals for its estate 14 years ago, this generated £152 million.

Although, Green also added that Chappell breached the covenant that was agreed with Arcadia by taking money out of the sales of BHS property.

It was reported that Chappell took £6 million from the sale of a BHS warehouse and £7 million from the sale of North West House after he claimed that he had put it back into a Bank of China account.


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BDC 305 Jun 2023