Former Home of Choice chief executive Gerry O’Brien says the network’s inability to service debts created in 2005 led it into administration.
In his first interview since LSL bought the assets of the mortgage network, O’Brien says it managed to service the debt and grow the business for five years but this became unsustainable.
Accounts for the year ending March 31, 2009, show the network owed creditors more than £5m.
He says: “Essentially, lending done in 2005 that would have been extremely difficult to sustain the payments on was the fundamental difficulty within the structure. That is why we looked to a share sale, that is why we were looking to sell.
“You have to bear in mind, we had serviced this debt for five years and managed to grow the business. But you need to be able to invest in your business. We know there is an opportunity to build and grow the business, with LSL’s help and assistance.”
Home of Choice filed an intention to enter administration after its initial preferred bidder failed to conclude the deal in the specified time, giving the network five days to find an appropriate investor.
After the failed takeover attempt, Home of Choice was in talks with a number of other bidders, including LSL and The Money Group. O’Brien says talks with LSL began within four days of the failed takeover and concluded within 13 working days.
O’Brien, who is now on the board of LSL subsidiary network First Complete, says: “The certainty and stability has been put back in place. We will be looking to grow and develop the proposition, preparing the right advancements to help brokers improve their transactional capability. We are in talks about the next three to five years and how to build the business.”