Decision details

Amendment to Loan Arrangement - JAN20/CMDN/75

Decision Maker: Cabinet Member for Finance

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Purpose:

The Cabinet Member:

 

1.    Approved the amendment of the terms of the Strategic Partnership with Empower Community Management LLP

2.    Approved the amendment of the financing agreement with ECS Peterborough 1 LLP

3.    Approved 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.    Delegated to the Corporate Director, Resources and Director of Law and Governance the ability to finalise matters 1 to 3 above.

 

Reasons for the decision:

This initial 2 month short extension supports the loan refinance process and enables the smooth transition of the loan from the Council to Global Tower Solutions.   In the event this has not completed or no longer offers the best value to the Council the additional six month extension will allow the Council to progress the refinancing of its loan with an alternative long term funding institution.

 

During the period of the extension the Council will continue to receive an income from the interest which will contribute to the Council’s MTFS savings targets.

Alternative options considered:

If the Council fails to extend the loan and wishes to continue the refinancing process with GTS, on 31 January 2020 the loan repayment will be due in full.  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 and Deloitte 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 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.

 

Interests and Nature of Interests Declared:

None.

Background Documents:

Cabinet Report JULY17/CAB/16

Councillor Member Decision Notice MAR18/CMDN/123

Councillor Member Decision Notice JUL18/CMDN/01

Councillor Member Decision Notice OCT18/CMDN/40

Councillor Member Decision Notice NOV18/CMDN/57

Councillor Member Decision Notice MAR19/CMDN/98

Cabinet Report SEP19/CAB/43

Councillor Member Decision Notice NOV19/CMDN/59

Publication date: 27/01/2020

Date of decision: 27/01/2020

Effective from: 31/01/2020

Accompanying Documents: