Sanctuary completes rescue takeover of Swan

Sanctuary has completed its takeover of troubled housing association Swan.

Essex-based Swan, which manages 11,600 homes, has now joined giant association Sanctuary as a subsidiary following the completion of a rescue deal this week.

The move to acquire Swan, which in 2021 breached a regulatory standard after losing control of development costs, means Sanctuary now owns 116,000 homes.

The Swan subsidiary will be headed up by Dave Soothill as managing director, who will move from his current role of Sanctuary development director. Susan Hickey, interim Swan chief executive, will leave the organisation.

The deal completes a long-running saga which began when the Regulator of Social Housing found the 11,600-home association to be non-compliant with its governance and financial viability standard after losing control of its development programme costs.

Swan later breached lending agreements relating to a £250m bond, its draft accounts also include an impairment charge of £138.6m in 2021/22 and a further £55.3m charge recognised as an adjustment in 2020/21, both relating to development schemes. 

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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.

Despite managing only 11,600 homes, Swan has previously claimed to have an 8,000-home development pipeline, including from its for-profit MMC developer subsidiary Swan New Homes, which trades as Nu Living. The firm has created a modular housing factory in Basildon, and fitted out  a second facility to take its build capacity to 1,000-homes a-year. However it has since decided to close the facilities.