Sanctuary’s rescue of Swan was supposed to be completed yesterday
Sanctuary’s rescue deal to take over troubled housing association Swan has been delayed due to failure to secure lender consents in time.
The merger between 105,000-home landlord Sanctuary and 11,600-home Essex-based Swan, signed off by both boards last Thursday, had been due to complete yesterday.
However in a stock market announcement yesterday afternoon, Sanctuary said: “The business combination between Sanctuary and Swan remains subject to obtaining appropriate consents and satisfactorily concluding commercial discussions with third parties.” A source close to the situation told Building’s sister title Housing Today the consents mentioned refer to lender approvals.
Sanctuary said a new timeline for the merger will be announced in “due course”. In the meantime, Sanctuary will instead provide ‘managed services” to Swan under an agreement.
In October it emerged Swan breached loan covenants but funder M&G Trustee Company said at the time it would not take any action in response on the basis the merger by 30 November. M&G has been asked for comment.
The saga surrounding Swan began last year when the Regulator of Social Housing found 11,600-home Swan to be non-compliant with its governance and financial viability standard after losing control of its development programme costs.
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Swan, which had invested significantly in modern methods of construction, initially went into discussions with Orbit regarding a merger before talks broke down following due diligence.
In October, as the loan covenant breaches emerged, it also came to light that Swan only held enough cash to last until early December, although it has since negotiated a £50m loan with Sanctuary.
Sanctuary and Swan have been contacted for comment.
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