The administration period for Sands Heritage Ltd, operator of Dreamland, has been extended until February 26, 2018.
It is the second extension of the period which usually only lasts for one year.
Sands Heritage went into administration in May 2016 – just under a year after the company reopened Dreamland amusement park.
The company suffered financial difficulty at the end of 2015 when it entered a voluntary debt plan after being hit with a net loss of £5 million and owing bills of £2,893,128.
In May 2016 Benjamin Wiles and Paul Williams, Managing Directors of Duff & Phelps, were appointed Joint Administrators of Sands Heritage Ltd, trading as Dreamland.
Last September it emerged that Sands Heritage Ltd owed an estimated £8.34 million to a list of creditors, including many small local businesses, and had a total deficit of some £14 million.
Extension
Duff & Phelps had aimed to market the business and sell the assets by March this year but that time has now been extended twice.
A report published by Duff & Phelps on Companies House also reveals that offshore firm Arrowgrass now owns 98.8% of the shares and is in the process of buying the remaining 1.1%.
All Sands Heritage Ltd directors – Nick Conington, Christopher Rudgard, Robert O’Connor and John Adams – have now resigned their posts. New directors are named as Steven Mitchell – currently the interim CEO at Dreamland – and Jennifer Double.
Funding
Arrowgrass initially loaned the company £600,000 in July 2016.The amount owed by August for the Arrowgrass loan was £2.3 million due to interest, charges and costs.
In March this year a massive £25million had been added to the investment. The Arrowgrass funding now stands at £27.4million
The cash was secured by placing legal charges on SHL’s 99 year lease of the Dreamland site, agreed with Thanet District Council (TDC) in 2015, and by placing charges on other, non-TDC, properties leased by SHL.
The properties include land at 43-47 Marine Terrace; land at 45-55 Eaton Road: Cinque Ports pub; Ziggy’s; fish and chip shop at 48 Marine Terrace and land at Dreamland amusement centre.
A lease has also been taken out on the Arlington car park.
Unsecured creditors
The progress report by Duff & Phelps states that £5.7 million is owed to unsecured creditors. They say it is “uncertain” as the whether there will be the money to pay those creditors.
The administrators say there is a trading deficit of £17.7million. This includes £8.3 million spent on rides, equipment and the buying of properties.
Options
In the report Duff & Phelps say they are: “in the process of assessing the most appropriate period of further administration trading and exit route from administration.”
They add: “The joint administrators are of the opinion that the continued trade of the business will add value to the business, increase the goodwill of the company and ensure the business can continue to trade outside of administration.”
They add that improvements include renovations and the addition of arena space to hold events such as last month’s Demon Dayz festival.
But they add: “A sale of the business and assets of the company remains a possible outcome of the administration, however, an immediate sale is not being pursued. The joint administrators are therefore continuing to trade during the 2017 Summer season.
“It is anticipated that when the time comes to market the business for sale there will be a large number of interested parties.”
A decision was also due to be made this week on the formation of a creditor’s committee and to approve a fee of £2.9million to the administrators.
A further progress report will be made by December 26.