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That's better. Now hop along, schnell schnell...

 

Of course, if there was a big enough party that could publically rip him a new one when the Tangerine Emperor comes out with stuff like this, then you might be able to say Hände hoch, das Spiel ist aus!

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Or: Tynwald is clearly being abused by some members who are effectively using it as a retirement fund.

In the Report ‘Government Support for the Sefton Group’ there are a number of what might be called core or central propositions which if successfully challenged render the supporting explanations stan

It is self interest, short-sightedness, poor planning, and thinking we still live in the 1950's, that has made Douglas the ever-worsening shit hole it is. People need to stand up against such iss

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In the Report ‘Government Support for the Sefton Group’ there are a number of what might be called core or central propositions which if successfully challenged render the supporting explanations standing upon them incapable of being sustained.


Core proposition 1. ‘The Sefton Group was in imminent danger of collapse‘.


However, the Chairman of the Group Sir Miles Walker and the Chief Executive “I felt secure in saying that we were not on the brink of collapse”


‘35 Sefton Group submission (Appendix 6). He added a rider to that statement with. “What I could not do – and somebody asked me the question. ‘Does that mean you will never go bust?’, or words to that effect, and I said, ‘I cannot say that.” The obvious absurdity expressed in the second statement is such that it requires no further examination. The point at issue is that is was clearly stated by the Chairman of the Sefton Group that he felt secure in saying that (we) were not on the brink of collapse”.


Core proposition 2. That the Middlemarch site was essential to the restructuring of the refinancing for the Sefton Group.


“51. The Sefton Group further pointed out that their new funders were not interested in the retention of Middlemarch. If they could have demonstrated an ability to bridge the last £1.5 million to make the restructure work, the new funders would have been unconcerned as to whether this came from Middlemarch or another source.


The Middlemarch proposal helped to bridge the last 10% or so of the required fundraising and was therefore important to the immediate restructure, but, according to the Sefton Group, it was primarily about preserving the Group's ambitions for moving to the town centre development.43”


The new finance providers from the private sector were identified as being:


“33. The restructuring involved the following elements:

 ESO Capital (a European special situations investment management group)

acting through its affiliate CDK provide funding for the Palace Hotel;


 Commercial property debt was ring fenced by the bank, so that the Group

had no liability to meet any shortfall or benefit from rising value;


 Major shareholders agreed to invest £2 million in new money;


 Government involvement was approved by the Council of Ministers for:

a. Purchase and leaseback of the Middlemarch site for £3.2 million;

and

b. A loan of £1.3 million.


Removing the Government element and concentrating only on the private sector the ‘major shareholders’ who had agreed to invest £2 million in new money are partially identified in the Sefton Group PLC Report and Accounts 2013 at page 7 under the Heading ‘Shareholders’.


“I reported last year (2012) that we now have a new lead shareholder in the guise of Auldyn Properties Limited. Of the £2.1 million of equity that we raised through the restructure and the subsequent rights issue, Auldyn and its affiliates provided a total of £1.58 million, some 75% of the all the new capital invested.”


Further, “No other major shareholders participated in the restructure or in the subsequent fundraising’.


A sensible reading of the facts and a reasoned conclusion thereafter shows that the Chairman and Director of the Group stated that neither of the two main elements of the restructuring of the financing were interested in the Middlemarch site at all.


It is important to keep in mind that the following evidence was presented to the Committee by the Chairman and Director of the Sefton Group.


“44. In response to the question what would have happened without Government intervention, the Sefton Group said:


‘It is difficult to give a definitive answer to this question. The restructure would

certainly have been more difficult to complete and had a higher risk of failing

but the funding gap would have been relatively small. The overall Lloyds settlement involved replacing, ring-fencing and partially discounting a total of £42 million of financial liabilities by raising £12.5 million – without Government

we would have had £11 million of that £12.5 million.

35 33 Appendix 4 34 Ibid“.


The funding was exactly £1.5 million pounds short of the target of £12.5 million pounds needed to complete the re-financing required.


The two main providers of the £11 million pounds already secured did not care if the Middlemarch site was disposed.


Could the Sefton Group have sold the Middlemarch site and made enough to secure the needed £1.5 million to complete the re-financing?


“The Group's valuation of Middlemarch indicated that it was worth about £5 million and, if sold, would produce about £2 million (£3 million going to pay down the site loans).18 The Group therefore approached the Government with a view to reaching a deal to allow the Government to purchase the site and allow the Group to make use of it later on“.


It is plainly the case that the sale of the Middlemarch site was a viable option for the Group to have taken, neither of the two major funders to the Group cared if it was disposed of according to the evidence given to the Committee.


“50. According to the Sefton Group:

One inevitable consequence of failure to conclude a sale to Government would have been the sale of Middlemarch to the highest bidder and the likely

scrapping of our town centre plans. We had already received an approach from one developer who was interested in an option over the site and an active marketing campaign with local agents would, in our view, almost certainly have elicited a higher price than the eventual Government figure of £3.2m. 42”


Putting it bluntly, the Sefton was £1.5 million pounds short of raising £12.5 million to complete a financial restructuring of the Group with the participation of its main banker, one new lender, and a new major shareholder, it had a disposable asset that would have provided the necessary funds out of a sale to complete the refinancing deal.


It didn’t need any Government money to complete the refinancing it had the means and a buyer already identified to complete the terms.


The Committee didn’t ask the Group’s Bank to give evidence to it, nor did it call before it the new majority shareholder or ESO Capital (a European special situations investment management group) acting through its affiliate CDK made no representations nor were they asked to do so by the Committee.


The only rational conclusions that can be arrived at are that the Sefton Group was in no immediate danger of collapse, it had sufficient assets to complete the funds it required to refinance, it had obviously been informed by the two main finance providers that disposal of the Middlemarch site was their preferred choice for raising the necessary capital to complete the refinancing of the Group, but the Chairman and Director’s of the Sefton decided to approach the Government because “it was primarily about preserving the Group's ambitions for moving to the town centre development”.


The froth and the determined attempts at obfuscation that have been made by the Chief Minister and Ministers in this affair once the rhetoric is peeled away reveals the only possible true motivation for the reason why the public was forced to top up the shortfall of £1.5 million pounds of the £12.5 million required by the Group for its refinancing and that had nothing to do with any claims of imminent collapse of the Sefton Group such claims being entirely without substance, nor was the Chairman or the Board of the Group bereft of options to complete the refinancing requirements that had been imposed upon it.


It was “primarily about preserving the Group’s ambitions for moving to the town centre development” nothing more and nothing less than that and the Government was the only source of funds willing to facilitate that.


The evidence is incontrovertible, the conclusions inescapable to logic, however flying in the face of all of it Mr. Singer, together with Mr Butt and Mr Coleman pronounced that “the Sefton was on the brink of collapse” and with a further flourish embellished that asinine statement by adding “We conclude that it is fruitless to speculate on what might have happened without Government support for the Sefton Group“. The fact that the majority of the Report is a nigh hysterical rendition of baseless speculations on that very same theme is obvious to anyone but them. For an unmistakable political agenda dressed up and then paraded about in tawdry rags the Sefton Report is a shameful example of the worst kind imaginable.


The convoluted and fantastical excuses given by the Chief Minister and the Council of Ministers for the Governments intervention in what is and should have remained a matter for the private sector has caused it and the Government reputation to be profoundly damaged and then dragged yet further into the mire.


Finally, the Committee was told that the banking crisis had led to less generous lending which in turn had led to fewer property buyers which in turn had led to less demand and low prices.


Moreover, the Committee noted at “53. In the circumstances, given the depressed state of all property markets at the moment, there would have been little or no prospect of a return for any unsecured creditors“. Which makes it all the more curious that Sir Miles Walker as the retiring Chairman announced in the Sefton’s Annual Financial Report on page 6 that the Group was selling a number of its top level Sefton Suites.


The Sefton Suites had been grant aided in 2008 in April 2008 conditional grant of £392,727 was awarded to the Group for construction of 9 "Sefton Suites" at the Sefton Hotel. The grant was given under the Visitor Facility Improvement Scheme 2007 and was secured with a commercial loan from HSBC pending completion of the Suites.


Sir Miles informed shareholders in the Report that the Sefton Suites had been created and aimed at the “film industry” and “high net worth customers” but “unfortunately this market was heavily impacted by the general economic downturn and has failed to fully recover but we have received interest from a number of parties interested in acquiring a suite for residential living”.


In spite of Steve Christian’s effusive submissions to the Public Accounts Committee about his role and the purpose of the £50 million pounds that had been placed at the service of generating business for hotels such as the Sefton, and regardless of the fact that the grant is repayable in full for a period of 15 years if the property is sold, and the claimed depressed state of the property market, Sir Miles offered the explanation that. “Key to our investment plans is the ability to generate cash and to apply it to profitable projects, with this in mind we have recently offered for sale a number of the Sefton Suites”.


ECONOMIC POLICY REVIEW COMMITTEE

SECOND REPORT FOR THE SESSION

2013-2014


Government Support for the Sefton Group


“31. The Government gave the following specific financial assistance to the Sefton Group plc in the last 10 years:


 Sefton Suites: in April 2008 conditional grant of £392,727 was awarded to the Group for construction of 9 "Sefton Suites" at the Sefton Hotel. The grant was given under the Visitor Facility Improvement Scheme 2007 and was secured with a commercial loan from HSBC pending completion of the Suites“.


21 Q. 148

22 Appendix 3 of Appendix 4 (page 116)

23 Appendix 413


“53. In the circumstances, given the depressed state of all property markets at the moment, there would have been little or no prospect of a return for any unsecured creditors. The receiver appointed by Lloyds would have been solely responsible to the bank and would have been entirely limited to look for a quick sale with the single aim of covering (or largely covering) his clients’ loans.45”


Without any doubting the Sefton has been highly successful in generating cash, and quite a lot of that money has come out of the public purse in one way or another, it should be remembered that the profit being generated is for the immediate benefit of the shareholders of the Group.


According to the Financial Report published by the Sefton, it has a declared the headline profit before tax (2013) £10.31 million, but at what cost has that profit for the shareholders of the Sefton been to the reputation and the credibility of the Government of the Isle of Man and its people?


Are COMIN finally learning the hard way that it really is impossible to fool all of the people all of the time?





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In the Report ‘Government Support for the Sefton Group’ there are a number of what might be called core or central propositions which if successfully challenged render the supporting explanations standing upon them incapable of being sustained.
Core proposition 1. ‘The Sefton Group was in imminent danger of collapse‘.
However, the Chairman of the Group Sir Miles Walker and the Chief Executive “I felt secure in saying that we were not on the brink of collapse”
‘35 Sefton Group submission (Appendix 6). He added a rider to that statement with. “What I could not do – and somebody asked me the question. ‘Does that mean you will never go bust?’, or words to that effect, and I said, ‘I cannot say that.” The obvious absurdity expressed in the second statement is such that it requires no further examination. The point at issue is that is was clearly stated by the Chairman of the Sefton Group that he felt secure in saying that (we) were not on the brink of collapse”.
Core proposition 2. That the Middlemarch site was essential to the restructuring of the refinancing for the Sefton Group.
“51. The Sefton Group further pointed out that their new funders were not interested in the retention of Middlemarch. If they could have demonstrated an ability to bridge the last £1.5 million to make the restructure work, the new funders would have been unconcerned as to whether this came from Middlemarch or another source.
The Middlemarch proposal helped to bridge the last 10% or so of the required fundraising and was therefore important to the immediate restructure, but, according to the Sefton Group, it was primarily about preserving the Group's ambitions for moving to the town centre development.43”
The new finance providers from the private sector were identified as being:
“33. The restructuring involved the following elements:
 ESO Capital (a European special situations investment management group)
acting through its affiliate CDK provide funding for the Palace Hotel;
 Commercial property debt was ring fenced by the bank, so that the Group
had no liability to meet any shortfall or benefit from rising value;
 Major shareholders agreed to invest £2 million in new money;
 Government involvement was approved by the Council of Ministers for:
a. Purchase and leaseback of the Middlemarch site for £3.2 million;
and
b. A loan of £1.3 million.
Removing the Government element and concentrating only on the private sector the ‘major shareholders’ who had agreed to invest £2 million in new money are partially identified in the Sefton Group PLC Report and Accounts 2013 at page 7 under the Heading ‘Shareholders’.
“I reported last year (2012) that we now have a new lead shareholder in the guise of Auldyn Properties Limited. Of the £2.1 million of equity that we raised through the restructure and the subsequent rights issue, Auldyn and its affiliates provided a total of £1.58 million, some 75% of the all the new capital invested.”
Further, “No other major shareholders participated in the restructure or in the subsequent fundraising’.
A sensible reading of the facts and a reasoned conclusion thereafter shows that the Chairman and Director of the Group stated that neither of the two main elements of the restructuring of the financing were interested in the Middlemarch site at all.
It is important to keep in mind that the following evidence was presented to the Committee by the Chairman and Director of the Sefton Group.
“44. In response to the question what would have happened without Government intervention, the Sefton Group said:
‘It is difficult to give a definitive answer to this question. The restructure would
certainly have been more difficult to complete and had a higher risk of failing
but the funding gap would have been relatively small. The overall Lloyds settlement involved replacing, ring-fencing and partially discounting a total of £42 million of financial liabilities by raising £12.5 million – without Government
we would have had £11 million of that £12.5 million.
35 33 Appendix 4 34 Ibid“.
The funding was exactly £1.5 million pounds short of the target of £12.5 million pounds needed to complete the re-financing required.
The two main providers of the £11 million pounds already secured did not care if the Middlemarch site was disposed.
Could the Sefton Group have sold the Middlemarch site and made enough to secure the needed £1.5 million to complete the re-financing?
“The Group's valuation of Middlemarch indicated that it was worth about £5 million and, if sold, would produce about £2 million (£3 million going to pay down the site loans).18 The Group therefore approached the Government with a view to reaching a deal to allow the Government to purchase the site and allow the Group to make use of it later on“.
It is plainly the case that the sale of the Middlemarch site was a viable option for the Group to have taken, neither of the two major funders to the Group cared if it was disposed of according to the evidence given to the Committee.
“50. According to the Sefton Group:
One inevitable consequence of failure to conclude a sale to Government would have been the sale of Middlemarch to the highest bidder and the likely
scrapping of our town centre plans. We had already received an approach from one developer who was interested in an option over the site and an active marketing campaign with local agents would, in our view, almost certainly have elicited a higher price than the eventual Government figure of £3.2m. 42”
Putting it bluntly, the Sefton was £1.5 million pounds short of raising £12.5 million to complete a financial restructuring of the Group with the participation of its main banker, one new lender, and a new major shareholder, it had a disposable asset that would have provided the necessary funds out of a sale to complete the refinancing deal.
It didn’t need any Government money to complete the refinancing it had the means and a buyer already identified to complete the terms.
The Committee didn’t ask the Group’s Bank to give evidence to it, nor did it call before it the new majority shareholder or ESO Capital (a European special situations investment management group) acting through its affiliate CDK made no representations nor were they asked to do so by the Committee.
The only rational conclusions that can be arrived at are that the Sefton Group was in no immediate danger of collapse, it had sufficient assets to complete the funds it required to refinance, it had obviously been informed by the two main finance providers that disposal of the Middlemarch site was their preferred choice for raising the necessary capital to complete the refinancing of the Group, but the Chairman and Director’s of the Sefton decided to approach the Government because “it was primarily about preserving the Group's ambitions for moving to the town centre development”.
The froth and the determined attempts at obfuscation that have been made by the Chief Minister and Ministers in this affair once the rhetoric is peeled away reveals the only possible true motivation for the reason why the public was forced to top up the shortfall of £1.5 million pounds of the £12.5 million required by the Group for its refinancing and that had nothing to do with any claims of imminent collapse of the Sefton Group such claims being entirely without substance, nor was the Chairman or the Board of the Group bereft of options to complete the refinancing requirements that had been imposed upon it.
It was “primarily about preserving the Group’s ambitions for moving to the town centre development” nothing more and nothing less than that and the Government was the only source of funds willing to facilitate that.
The evidence is incontrovertible, the conclusions inescapable to logic, however flying in the face of all of it Mr. Singer, together with Mr Butt and Mr Coleman pronounced that “the Sefton was on the brink of collapse” and with a further flourish embellished that asinine statement by adding “We conclude that it is fruitless to speculate on what might have happened without Government support for the Sefton Group“. The fact that the majority of the Report is a nigh hysterical rendition of baseless speculations on that very same theme is obvious to anyone but them. For an unmistakable political agenda dressed up and then paraded about in tawdry rags the Sefton Report is a shameful example of the worst kind imaginable.
The convoluted and fantastical excuses given by the Chief Minister and the Council of Ministers for the Governments intervention in what is and should have remained a matter for the private sector has caused it and the Government reputation to be profoundly damaged and then dragged yet further into the mire.
Finally, the Committee was told that the banking crisis had led to less generous lending which in turn had led to fewer property buyers which in turn had led to less demand and low prices.
Moreover, the Committee noted at “53. In the circumstances, given the depressed state of all property markets at the moment, there would have been little or no prospect of a return for any unsecured creditors“. Which makes it all the more curious that Sir Miles Walker as the retiring Chairman announced in the Sefton’s Annual Financial Report on page 6 that the Group was selling a number of its top level Sefton Suites.
The Sefton Suites had been grant aided in 2008 in April 2008 conditional grant of £392,727 was awarded to the Group for construction of 9 "Sefton Suites" at the Sefton Hotel. The grant was given under the Visitor Facility Improvement Scheme 2007 and was secured with a commercial loan from HSBC pending completion of the Suites.
Sir Miles informed shareholders in the Report that the Sefton Suites had been created and aimed at the “film industry” and “high net worth customers” but “unfortunately this market was heavily impacted by the general economic downturn and has failed to fully recover but we have received interest from a number of parties interested in acquiring a suite for residential living”.
In spite of Steve Christian’s effusive submissions to the Public Accounts Committee about his role and the purpose of the £50 million pounds that had been placed at the service of generating business for hotels such as the Sefton, and regardless of the fact that the grant is repayable in full for a period of 15 years if the property is sold, and the claimed depressed state of the property market, Sir Miles offered the explanation that. “Key to our investment plans is the ability to generate cash and to apply it to profitable projects, with this in mind we have recently offered for sale a number of the Sefton Suites”.
ECONOMIC POLICY REVIEW COMMITTEE
SECOND REPORT FOR THE SESSION
2013-2014
Government Support for the Sefton Group
“31. The Government gave the following specific financial assistance to the Sefton Group plc in the last 10 years:
 Sefton Suites: in April 2008 conditional grant of £392,727 was awarded to the Group for construction of 9 "Sefton Suites" at the Sefton Hotel. The grant was given under the Visitor Facility Improvement Scheme 2007 and was secured with a commercial loan from HSBC pending completion of the Suites“.
21 Q. 148
22 Appendix 3 of Appendix 4 (page 116)
23 Appendix 413
“53. In the circumstances, given the depressed state of all property markets at the moment, there would have been little or no prospect of a return for any unsecured creditors. The receiver appointed by Lloyds would have been solely responsible to the bank and would have been entirely limited to look for a quick sale with the single aim of covering (or largely covering) his clients’ loans.45”
Without any doubting the Sefton has been highly successful in generating cash, and quite a lot of that money has come out of the public purse in one way or another, it should be remembered that the profit being generated is for the immediate benefit of the shareholders of the Group.
According to the Financial Report published by the Sefton, it has a declared the headline profit before tax (2013) £10.31 million, but at what cost has that profit for the shareholders of the Sefton been to the reputation and the credibility of the Government of the Isle of Man and its people?
Are COMIN finally learning the hard way that it really is impossible to fool all of the people all of the time?

You haven't mentioned the casino licence which I understood to be a major factor in their wishing to move to the centre of Douglas.

Didn't I see somewhere that they had been promised they would be the only casino licence holder?

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'You haven't mentioned the casino licence which I understood to be a major factor in their wishing to move to the centre of Douglas.

Didn't I see somewhere that they had been promised they would be the only casino licence holder?'

 

The Casino Licence and related matters is deserving of much closer examination. When the information has been checked I will post up on this aspect.

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Didn't Mount Murray finally get a casino licence last year? Which spurred on the redevelopment plans.

not according to..........

 

http://www.gov.im/gambling/licensees/

Maybe not then. Kind of makes a mockery of the free market when the government turns down casino licence applications when it holds a stake in the only company to have granted a licence to. Conflict of interest?

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Didn't Mount Murray finally get a casino licence last year? Which spurred on the redevelopment plans.

not according to..........

 

http://www.gov.im/gambling/licensees/

Maybe not then. Kind of makes a mockery of the free market when the government turns down casino licence applications when it holds a stake in the only company to have granted a licence to. Conflict of interest?

 

 

Oh yes.

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Move goalposts ......... raise carpet and sweep ........ lower carpet ........ lessons have been learned ....... we move on !

 

Mind you as cynical as I am it is true lessons have been learned, take the NI review shambles, the lesson that has been learned in this case is that we are not going to seek a legal opinion ! sorted !

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