The Candy brothers in bid to save US project

UK Property tycoons Nick and Christian Candy and their Icelandic banking partners were today locked in last-ditch talks to save an ambitious development in the US.

Plans to build the most luxurious residential development in the world in Beverly Hills were thrown into confusion by growing concerns for the future of Kaupthing, Iceland's largest bank. Most pressing for the Candy brothers is a $356.5 million (£202 million) loan due for repayment to Credit Suisse tomorrow relating to the project in California.

Kaupthing is liable for 60% of the loan, which with working capital amounts to a $240 million interest. Mike Samuels, Kaupthing's head of property, was in the US today thrashing out a deal with Credit Suisse.

"We can confirm discussions are still taking place about the refinancing of the project," a Kaupthing spokeswoman said.

Christian Candy told the Evening Standard: "We will meet our financial commitments in Beverly Hills and we hope Kaupthing will be there with us."

Kaupthing yesterday took a 500 million (£387 million) emergency loan from Iceland's central bank to bolster its balance sheet following the nationalisation of rivals Landsbanki and Glitnir. The bank today said it was in talks with the Icelandic Financial Supervisory Authority over the reorganisation of Glitnir.

Last year the Candys and restaurant owner Richard Caring — through Christian Candy's Guernsey-based development firmCPC — joined Kaupthing to buy eight acres of brownfield land in Beverly Hills for $500 million and convert it into one of the most luxurious residential developments in the world.

It is thought the Candys are now in talks with other potential investors and may be prepared to buy Kaupthing out of the project should it withdraw. Kaupthing is also CPC's debt and equity partner in the redevelopment of Middlesex Hospital in central London, or Noho Square as it is known. The Icelandic bank provided a loan which runs to 2011 but has failed to sell down its £220 million of debt on the three-acre site, which was bought for £175 million in 2006 but is now thought to be worth no more than £150 million.
Nick Candy today moved to allay fears on both projects. "I'm sure it will be absolutely fine," he said. "It is business as usual on Noho Square. We are still fully committed to it and nothing has changed."

The Candy brothers are not the only Brits feeling the chill from Iceland.Banks and investment vehicles in Iceland have interests in several UK chains like Hamleys, House of Fraser, Oasis and Karen Millen.

Robert Tchenguiz last night sold his 25% stake in UK pubs group Mitchells & Butlers. More than 100 million shares in the All Bar One changed hands for 130p each compared with a market price of 163p.