Update on Purchase of the Kings Arms Inn
In April we agreed Heads of Terms with Horatio Properties (Guernsey) Ltd. (“HPL”), the owners of the Kings Arms, which called for completion of the purchase by 30 September 2018. We have been diligently working towards this goal since that date.
Part of the agreement involved SCPL issuing up to £200,000 of “deep discounted” bonds to HPL. Around September 10th HPL informed us that due to technical legal difficulties with using this form of lending whilst taking a first legal charge on the property, they wished to replace the bond issue with an equivalent loan.
From our end we saw no difficulty with that change, and indeed it is both simpler and likely to be beneficial to the cash flow of the Society, with regard to our future corporation tax payments. We continue to work closely with HPL, and there is a frequent dialogue between the parties.
HPL have confirmed that there is no change to the overall finance payments we will be making under the proposed new loan agreement.
In August we received the results of the structural survey on the building, and we are currently engaged in addressing several issues which arose from that survey. We have had a series of meetings with various contractors to discuss the renovation works.
Given the above, there will be a delay in completing the purchase as we refine our financial model and our solicitors work through the new documentation. We are now aiming for exchange of contracts to take place by 31st October 2018 which has been agreed as realistic by HPL.
This is a somewhat complex transaction with many strands that need to be carefully analysed, worked through, and timed. This includes obtaining a premises licence, comprehensive insurance cover, VAT registration and tax advice. We will of course update you further as we approach exchange and hope to shed more light on when the pub will reopen.