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Friday, 13 January 2017

Dreamland Latest! Creditors May Lose £5million. Operating Loss +£1million. Administrators May Sue For Lost Earnings.


In a report published  on the Companies House website today (13/01/17) Dreamland administrators, Duff & Phelps,  say  “it is uncertain whether there will be sufficient realisations” to enable Sands Heritage to pay back all of the the £5.25million it owes  to hundreds of   unsecured creditors. Many of these creditors are small local firms owed relatively small amounts, but who will find it extremely difficult to overcome the financial damage caused by being stiffed by Sands.

Duff & Phelps’ report also reveals that Margate Dreamland operator, Sands Heritage, has racked up an operating deficit of £1,067,939 million during its  first 6 months in administration which equates to losses of £41,000 per week.  Duff and Phelps  blame bad weather and the long-term closure of the scenic railway during the 2016 summer season as the major causes of this loss.

In a surprise announcement Duff  & Phelps say that they will be “looking into a claim of loss of earnings in relation to the closure of the Scenic Railway”. I assume that this will be either a claim against Thanet Council which owns the scenic railway, or perhaps another organisation. In November 2015 a  loss of earnings  claim was brought against Thanet Council by park operator Sands Heritage which was settled for £913,000. With its key attraction out of commission for most of the 2016 summer season I think that any claim which might be made against the council could easily  be in excess of £1million, which will have to be covered by  Thanet council taxpayers.

Duff and Phelps have also reported  that Sands Heritage will remain in administration throughout 2017 and that there will be a substantial investment in the amusement park over the winter months which will be funded by offshore, Cayman Island registered, Arrowgrass Master Fund which owns 31% of Sands Heritage shares and who recently extended their loan facility to Sands Heritage to £10million. The additional investment and extension of the administration period will according to Duff and Phelps “enhance the financial performance” of Sands Heritage making the eventual sale of the business and its assets a much more attractive proposition.
A major public investment of at least  £20 million has been made  in the acquisition, development and opening  of Margate’s Dreamland Amusement Park. By the time  any potential compensation claims and compulsory purchase order disputes have been settled, this could easily reach £30million. Two thirds of that total will have  been  paid for by Thanet council taxpayers which works out at £143 for every man, woman and child living in the district. This is a high price to pay for an Amusement Park which, for the past 6 months,  has been losing  over £41,000 per week; who’s operator failed owing unsecured creditors £5.25 million,  and which is now entirely dependent for its survival on investments from an offshore,  tax-dodging,  hedge fund. Dreamland has now become, in my opinion,  one of the largest public sector project management disasters  in the country,  characterised by what many people, including our  2 local MPs, believe to be breath-taking incompetence and maladministration. There is an urgent need for an independent public enquiry. Those identified by such an inquiry as being responsible for this disaster  should be held to account and where appropriate dismissed from their  posts.

2 comments:

  1. THe £1M trading loss only covered a 6 month period. In my view here is no sign at all of Dreamland being turnd around the underelying trading loss still seems to be running at £2M a year. With all the debt it also has plus the interest on the debt I cannot see it surviving. It looks to me as if Arrowgrass have been set up to buy the site ones Dreamland goes under

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  2. It would have had to be of another caliber to attract enough visitors to be successful. We live in Ramsgate with three little girls. We looked it up online (price, rides, etc...) and decided not to bother. I am sorry for all the everyday people who have lost feathers in this (that probably includes us through our council tax!).

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