Warrington Council could lose millions it invested

The council pumped a multimillion-pound investment - £10million - into the Mailbox leisure facility in Birmingham, and the company behind that has defaulted on one of its loans.

Warrington Borough Council owns 12 per cent of the Mailbox as a result of its £10million investment.

This means that the company has decided to sell the Mailbox for a sum of around £120million.

Of this, 90 per cent is set to be paid back to Deutsche Bank in an attempt to recoup the defaulted loan.

This means that Warrington Borough Council is set to receive just £1.4million of its initial investment back - netting a loss of around £8.6million.

The council could be set to lose more than £8million from its investment (Image: Supplied)

When quizzed by the Warrington Guardian about whether this loss of money would have a detrimental impact on public services in the town - in particular, bin collections - a council spokesperson said: "No loss has currently occurred with this investment.

"If the investment were to fail, it would not result in any budget cuts or impact on future bin collections.

“It is important to note that we have not invested in a property in Birmingham. This is an investment in a property fund – something that many councils do - that happens to be secured on a property in Birmingham. 

“The current situation with this investment is reflective of the economic climate, with interest rate and yield movements that have adversely affected valuations both nationally and internationally.

"However, the Mailbox asset continues to generate record rents. The asset is currently undergoing a re-structuring exercise which will take several months to finalise.

“We prudently have a strategic risk reserve made up of contributions from previous investment returns that would offset any future losses.”

Warrington Borough Council's level of debt is expected to rise to more than £2billion by the end of 2026.