Santander defends decision to withdraw support for Pontin's debts

Holiday park's former owner has accused banking giant of pushing the firm into administration.

Pontin's former owner Graham Parr has accused the holiday park's banker Santander of pushing the business into administration by refusing to support the company's credit facilities, claims which have been refuted by Santander. The bank has pointed out that Pontin's failed to restructure the £40m worth debts it owed to Santander.

The stricken holiday chain appointed administrators from KPMG on Friday night after the holiday park saw a drop-off in occupancy levels and ran out of cash because of the economic downturn and a weak sterling.

KPMG joint administrator Jane Moriarty supported the bank's decision saying, "If a business fails to turn its fortunes around, lenders, ultimately, will not bankroll in perpetuity."

In line with Santander's commitment to fund Pontin's as a going concern for several months, the bank had made a £5m revolving overdraft facility available, of which £2.25m was then drawn.

Moreover, for a £450,000 arrangement fee, Santander also extended £40m of loans secured by personal guarantees from the directors, of which £7.5m were due to be repaid by March this year.