Government is backing the financial restructuring of a prominent Island business group to help protect the local economy, Chief Minister Allan Bell MHK announced today (Friday April 19, 2013).
The aim is to assist the recovery of the Sefton Group, which employs 300 people in the tourism, leisure and construction sectors, and spends £7.3 million a year in the Island’s economy on wages and suppliers. The Group includes the Sefton and Palace hotels, and the building firm Parkinson’s.
Government's support has enabled the Group to complete a comprehensive programme of debt reduction totalling £72 million, which has been underway since new management took over in 2010. The Department of Economic Development has legal powers to assist companies under the Enterprise Act and is providing the Sefton Group with a loan of £1.3 million repayable after five years.
Government is also extending its control of strategic sites in lower Douglas by using £3.2 million from the Treasury’s Land Acquisition Reserve to purchase the Middlemarch site from the Group, to which it will be leased back over the next five years. The Middlemarch site is located between Walpole Avenue and Fort Street in Douglas.
The Chief Minister explained:
‘The Sefton Group is extensively involved in the economic life of the Island. The completion of its recovery programme protects a significant number of jobs, and has knock-on benefits to local suppliers and business confidence generally. Government had a clear choice – to sit back and allow the Sefton recovery programme to falter at a time when the domestic economy is already vulnerable, or play a small but decisive part in bringing it to fruition. We have a duty to support the economy, and that includes assisting business recovery when a favourable outcome can be demonstrated. This intervention by Government is justified by the extent and scale of the Sefton Group’s role in the wider local economy. There will be questions about the deal, naturally, but I believe it is the right and responsible thing to do in the circumstances.’
