Insider Media Limited

Targetfollow, the property developer behind Birmingham's £30m Baskerville House development and the Baskerville Wharf project, is facing a battle to avoid administration. Its founder Ardeshir Naghshineh told Insider that it is "expected to pay" £200m to Lloyds TSB and hit out at the bank, claiming it has been charging 6 per cent on its loans - 5.5 per cent more than the Bank of England base rate.

Insider understands the company has to submit a rescue plan to Lloyds TSB by today or could face the appointment of administrators next week.

The Norwich-based group, which has also been involved in Stockport's Grand Central scheme, is believed to have been in talks over a £230m loan which matured in July with an outstanding £450m loan set to mature next month.

Naghshineh told Insider: "The first thing to say is that the negotiations between the parent company and Lloyds Bank do not involve or affect day-to-day operations of our businesses, which are performing extremely well despite the difficult conditions.

"However, at corporate level we are being charged 6 per cent for our bank loans when the government has driven the base rate down to 0.5 per cent specifically to help businesses through the recession.

"The Bank of England has just criticised the banks for their interest rate ‘mark-ups’ to homeowners and the truth is that the same thing is happening to commercial property companies."

He said the company is facing a "£200m liability" which it is "expected to pay".

He added: "Of course, we understand that Lloyds is under pressure from the government to raise the funds to pay back its bail-out, and we want to do what we can to help and maintain a positive relationship with our bankers. But the way they (Lloyds) are handling this makes no sense to me.

"The bank’s insistence on immediate sales of assets, under the permanent threat of administration, has naturally driven down their value, whereas a fair and orderly sale process, with a reasonable amount of time to market the properties, would maximise the value and be far better not just for us but also for the bank and ultimately the taxpayer.

"We have presented a large number of viable solutions to Lloyds but they have all been rejected out of hand. Still, we have no intention of giving up, particularly as the independent valuations of our properties far exceed those put forward by Lloyds’ valuers."