Zentra Group (LSE:ZNT) said Torsion Construction, the principal contractor on its One Victoria development in Manchester, filed a notice of intention to appoint administrators on 20 July.
The Manchester-based residential developer, development manager and property manager focused on the North of England said administrators had not yet been appointed as of the announcement.
Zentra holds a 30% equity interest in the project's developer, Zentra Great Ducie Street, alongside a loan with a face value of £4.1 million, first disclosed on 30 May 2025.
Construction is at an advanced stage, with apartment fit-out substantially complete and external facade works in their final phase.
The remaining works, estimated at around eight weeks once new arrangements are in place, cover external and communal areas, finishing and snagging, testing and commissioning, and outstanding inspections.
The developer is in discussions with its secured development finance provider, a potential replacement contractor and key subcontractors, while taking steps to secure the site and protect its position under the building contract.
Zentra now expects practical completion in the fourth quarter, having previously flagged the construction programme on 25 June.
The company said it does not currently expect the contractor's situation to materially affect recovery of its loan, which remains expected to be repaid from project proceeds on completion.
News Intelligence what this means for the company
Torsion Construction, the main contractor on Zentra's One Victoria Manchester residential scheme, filed notice to appoint administrators on 20 July, but construction is at an advanced stage with only around eight weeks of work remaining. Zentra holds a 30% equity stake and a £4.1 million development loan in the project, and management says it does not expect the contractor's distress to materially affect loan recovery, which is tied to completion expected in Q4 2026.
The contractor's insolvency risk is material to execution risk on One Victoria, but the advanced construction stage and Zentra's stated confidence in loan recovery from project proceeds limit the downside. The outcome depends on whether a replacement contractor can be secured and whether the development finance provider and subcontractors remain committed through completion.
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