Mountgrange Capital files for administration, plunging controversial Edinburgh scheme into confusion
Mountgrange Capital, the developer behind the £300m Caltongate scheme in the centre of Edinburgh, has filed for administration.
The Caltongate development would have seen a transformation of the city's Old Town, with a five-star hotel, conference centre, 200 new homes and a new public square planned for the site just off the Royal Mile.
But Mountgrange's collapse has prompted fears that a “gaping hole” will be left in the centre of Edinburgh. The developer blamed the property market and the withdrawal of financial support from HBOS for its failure.
Caltongate was one of the most controversial developments in Edinburgh, causing a bitter rift between the Scottish authorities, which approved of the scheme, and heritage bodies including Unesco, which threatened to strip the city of its world heritage status if it went ahead.
However, there appeared to be a ray of light for the scheme, as the developer's directors said they planned to establish a new fund to help finance its construction.
In a joint statement, Manish Chande and Martin Myers said: “We believe that these schemes continue to have commercial merit. We are examining other alternatives including making an offer to buy the assets out of administration and are uniquely placed to do so.”