Thursday, 11th July, 2013
Call for clarification following Bluestone buy-out
It was announced this week that the Bluestone holiday resort has been subject to a management buy-out.
Both the Western Telegraph and BBC Wales news report that co-investors Lloyds Banking Group and Finance Wales have been bought-out by existing directors backed by a locally-based syndicate of ‘private investors.’
Some years ago, Pembrokeshire County Council made a loan to the then troubled Bluestone, a sum which is reputed to have been northwards of a million pounds.
In lieu of re-payment of this loan, in late 2009 the council’s cabinet sealed a deal whereby the large sum of money was exchanged for 3% of shares in Bluestone.
What effect – if any – this week’s management buy-out might have on the council’s holding, and its value, remains to be seen.
I’ve asked for clarification over this matter to be delivered as an emergency item at the next county council meeting, which is to be held on the 18th July.
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I asked for clarification on this several months ago and received a very non committal letter from the Finance Director. The whole transaction needs clarification. Has the County Council lost a great deal of council tax payers’ money? What was the role of the Chief Executive and the Finance Director in this? What advice did they give to the Council? The public have the right to know. Thank you for tabling the question. Please press for a full and proper answer.
Keanjo, It seems that the Director of Finance can sign Jamie Adams’ expenses for 4 years in a few days but you are still waiting. It stinks.
An interesting question is the valuation of the business if the Council converted debt to equity. Of course, the Council would not seek to mislead anyone (he laughed) but an interesting insight into the evasiveness of the Council is here:
https://www.whatdotheyknow.com/request/24178/response/61757/attach/html/4/FOIAreply1404attachment1.pdf.html
Now, if the Council took up the option of the 3% holding in lieu of repayments of a £1m loan – that would indicatively value Bluestone as a company as being worth around the £33m mark. The reported sale figure is around 1/3rd of that sum devaluing the 3% equity accordingly.
No doubt, this is all above board and the Council’s explanation will be considerably more believable than the leader’s explanation for his expenses claims.
I’m afraid the situation is worse than that. The debt included the £750,000 spent on the roundabout scheme and if the value of the 3% equity is £330,000, the County Council has lost a great deal of council charge payers’ money. I hope they have a good explanation ready for Thursday.
I wonder what the total business rates have accrued to date, and how much of it has been paid.
What happened at the meeting Jacob?
Hi Keanjo, I’ll write about it over the weekend or early next week – in a nutshell, the leader delivered a pre-written speech, the chairman did not allow any members to discuss the matter or ask questions of the leader apart from me and my sole ‘supplementary’ question.
The statement told of the important economic benefit brought to Pembrokeshire off the back of the council’s “bold” decision to sink money into the Blue Lagoon, among other things.
I like the vision of our money sinking into the blue lagoon presumably never to be seen again!
I have just had a reply to my FOIA request “What was the value in the annual accounts of the Council’s investment and/or loans in Bluestone and associated companies?”
The reply states £3. Not £3million, not £300,000, not £3,000 not £300 and not even £30. Just £3!
I shall be writing to PCC tomorrow to offer them £6 for their stake – after all that will double their money. As they invested £1.75million I can’t see how they can turn down a chance to minimise their losses.
Jacob, I have been informed by the FOI team that the county council’s holding in Bluestone has been reduced from 3% to 0.5%.
The response included a statement that it was not possible to place a value on the holding.
Your previous investigation into this did not result in a satisfactory response. What is going on?
Good luck in the forthcoming election.