In papers filed at the High Court, it was revealed Beckton was seeking to call on the bond for £8.27m in liquidated damages due to Murphy missing construction targets on the scheme. Murphy was contracted in March 2013 under a £70m EPC contract by the new generation green utility company 2OC Ltd to build a Combined Heat and intelligent Power (CHiP) plant. The plant is expected to provide up to 18Mw of electricity back into the National Grid and 1Mw of renewable heat to power Thames Water’s Beckton Waste Water Treatment Plant using recycled fuels derived from fats, oils and greases. THe job has already been highlighted as being behind the £9.1m loss accrued by Murphy in 2014. In its results for the year to 31 December 2014, Murphy highlighted ”difficulties with design, cost escalation, supply chain and engine-related technical breakdowns at its Beckton CHP scheme”. And papers filed at the High Court, show Beckton Energy Ltd has sought to claim the sum of £8.27m under a performance bond after it claimed Murphy missed several targets. Murphy was contracted to reach a ROC accreditation milestone by 2 November 2014. This means Ofgem awarding Renewables Obligation accreditation to the scheme based on completion of tests that showed the plant was capable of commercial operation. It was also expected to complete works by 31 January 2015 and the project has still to be handed over. The project had been funded with the aid of a loan facility of £53m plus VAT facility of £2m, while Beckton’s shareholders committed £17m. The first repayment was due on 30 September 2015, which Beckton has paid, and is due every six months thereafter, According to the papers, Beckton has ”now exhausted all possible sources of committed funding and needs payment of delay damages”. It says its net position as at 31 March 2016 will be an indebtedness of £1.4million and rising. The court papers state: ”Without payment under the Bond, Beckton does not believe that its auditors will be able to give an unqualified opinion as to its solvency, which would have grave consequences for Beckton, being a default event under the facilities agreement and damaging to Beckton’s credit status.” Murphy said a call on the Bond ”gives rise to a risk of damage to its commercial reputation, standing and creditworthiness, and would be something that might well need to be disclosed in future tenders”. But Beckton said ”it will suffer dire consequences if it is not able to make a call on the Bond, by 23rd March 2016 at the very latest”. Murphy had sought injunctive relief against Beckton preventing it from making a demand on the bond until there had been agreement or determination from the project engineer, Christopher Turner of Capita Symonds. Beckton claimed Murphy failed to achieve the ROC Accreditation Milestone and to achieve the taking over date as required in its contract. It also claimed Murphy’s claims for extensions have not been granted by the engineer ”on the basis that Murphy had not demonstrated that any event or circumstances giving rise to a claim for extension of time or payment had occurred”. Murphy said it had has suffered significant delays on the project and requested extensions of time on five separate occasions between August 2014 and December 2015. The contractor also said it is entitled to an extension of time and that Beckton is deemed to have taken over parts of the works, a claim contested by Beckton. Mrs Justice Carr ruled Beckton could ”in good faith assert breach on the part of Murphy for delay and claim a sum of delay damages as a consequence of such breach” and that ”it would not be fraudulent for Beckton to make a call on the Bond in the absence of agreement or determination by the Engineer” as per the contract. Justice Carr asked that the parties draw up an order accordingly and agree all consequential matters, including costs, so far as possible.  Beckton Energy Ltd, 20C Ltd and Murphy Group all declined to comment. Source link

Last month, we carried out a UK-wide survey to help us understand the wider perceptions of access to loans and finance and found a general lack of awareness of the many alternatives to the mainstream lenders. The research showed that 46 per cent felt it was more difficult to obtain finance for property now than in the past, yet the growth in the alternative finance sector proves that there’s more choice than ever before when it comes to finding the right funding. Specialist lenders, crowdfunding and peer-to-peer lenders all take very different approaches to the more traditional forms of funding and can serve a variety of needs. For example, almost a half of those surveyed believe that credit rating will make the biggest difference in a loan being accepted. With specialist lenders like ourselves, that’s simply not true. At Together, our decisions are based on the individual circumstances, rather than a rigid criteria and computerised credit score. We call it common sense lending and essentially it’s this that sets us apart from the mainstream. For commercial clients and those buying at auction, it’s usually speed that is the reason for turning to a specialist. Whilst the mainstream perception is that loan applications take a long time – over a fifth of those we surveyed felt this was the case – in fact specialist providers can provide funding in incredibly tight timescales, which a traditional lender may struggle to deliver. A quarter of those we surveyed felt that loans are processed with little attention to individual circumstances, but again, with a specialist lender, this isn’t the case.  Looking at each application on a case-by-case basis, we have greater flexibility than a mainstream lender. Auction property purchases are a good example of this. There are certain issues that can potentially arise with properties bought at auction that would stop a high street lender from providing a mortgage. For example, if the kitchen or bathroom are in a condition considered unsanitary, the buyer will have difficulty obtaining finance from a traditional bank, whereas if the buyer intends to renovate the property, we’d take that into consideration and bear it in mind when reviewing the application. Ultimately it’s that individual approach that’s going to make the difference that would result in the purchaser getting the funds he needs. The growth across the alternative finance sector looks set to continue and that will bring with it greater awareness, but hopefully in the meantime, we can help drive that process by letting people know that when it comes to finding the right funding, there are plenty of options out there – you just need to know where to look. Source link