Decision details

A loan facility previously approved by Cabinet requires approval of an amendment to that arrangement. To be presented to Cabinet on 15^th July 2019.

Cabinet considered the report and RESOLVED to:

1. Approve the amendment of the terms of the Strategic Partnership with Empower Community Management LLP. 
2. Approve the amendment of the financing agreement with ECS Peterborough 1 LLP. 
3. Approve the Council entering into such further agreements with ECS Peterborough 1 LLP and any other body necessary to facilitate the arrangements set out in this report. 
4. Delegate to the Corporate Director Resources and Director of Law and Governance the ability to finalise matters 1 to 3 above.

This short extension supported the loan refinance process and enabled the smooth transition of the loan from the Council to Global Tower Solutions. During the period of the extension the Council would continue to receive an income from the interest which would contribute to the Council’s MTFS savings targets.

If the Council fails to extend the loan, then on 1 October 2019 the loan repayment will be due in full and if it is not made ECSP1 will be placed into default and the Council would be required to exercise its security and take over the assets of the company. At this point the Council will then have to operate the company either on a long term basis or on a short term basis whilst it concludes the long term financing process. This option is not considered to be in the Council’s best interests at this time for the following reasons:

1.    The Council does not have experience of operating in this market and would therefore need time to acquire the additional skills and personnel required to operate the ECSP1 business, in addition it would require additional advice from its legal and financial advisors Pinsent Masons LLP and Deloitte LLP and would need to procure a specialist technical advisor for this process.

2.    The refinancing negotiation progress with Global Tower Solutions would be subject to considerable delay and incur further legal expense in order to reflect the change of ownership.

The Council can choose to continue funding for ECSP1 over the life of the solar panel assets, but:

1.    the current loan was not constructed as a long term facility and a long term loan will require the implementation of a new loan facility; and

2.    this course of action does not fit within the Council’s current financial strategy.

None.

Cabinet Report JULY17/CAB/16

Cabinet Member Decision Notice MAR18/CMDN/123

Cabinet Member Decision Notice JUL18/CMDN/01

Cabinet Member Decision Notice OCT18/CMDN/40

Cabinet Member Decision Notice NOV18/CMDN/57

Cabinet Member Decision Notice MAR19/CMDN/98