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Developers claim £300m project is safe

posted 10 Feb 2009, 21:54 by David Rintoul   [ updated 1 Nov 2009, 18:11 ]

Developers behind a hugely controversial project in Edinburgh city centre yesterday insisted they were pressing ahead with the venture – despite reports that the scheme is on the brink of collapse.

London-based Mountgrange has declared it was "actively pursuing" the £300 million Caltongate development in Edinburgh's Old Town, despite the firm reporting a £24.3 million loss last year. Mountgrange has racked up £51 million in debts, including £20 million in bank loans and overdrafts.

The firm's auditors have admitted there is a "material uncertainty that casts doubt about the company's ability to continue as a going concern".

In its latest accounts, the firm admits it is "very disappointed" with its financial results, which it has blamed on the "severe effects" of the credit crunch.