Andium Homes Ltd: Extension of Loan 11

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A decision made on 22 December 2021

Decision Reference: MD-TR-2021-0151
Decision Summary Title:	Andium Homes Ltd – Extension of Loan 11		Date of Decision Summary:	20th December 2021
Decision Summary Author:	Head of Treasury and Investment Management		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Andium Homes Ltd – Extension of Loan 11 – Ann Street Brewery		Date of Written Report:	20th December 2021
Written Report Author:	Head of Treasury and Investment Management		Written Report: Public or Exempt?	Exempt – FOI Art. 33
Subject: Andium Homes Ltd – Extension of Loan 11 – Ann Street Brewery
Decision(s): The Minister:- Approved the extension to the repayment date of loan 11 to 31st December 2022. Authorised confirmation of the loan extension to Andium in line with existing terms.
Reason(s) for decision: The States in approving P.129/2014 on 22nd September 2014 agreed that the Minister could vary the purposes of the Housing Development Fund (“HDF”) to lend to Andium Homes Ltd. Under MD-TR-2017-0105 loan 11 was issued to Andium Homes Ltd for the purpose of acquiring the land of the former Ann Street Brewery. Loan 11 was drawn down from the HDF on 10th August 2017. The total amount drawn was £7,050,000 with an extended repayment date of 31st December 2020. The capital repayment date of the loan was originally envisaged to align with the commencement of the main contract for this project, however the project was expanded to incorporate the wider development in the north of town. The original planning application was submitted in November 2020. Planning discussions have been more extensive than anticipated, with a revised planning application due to be submitted shortly following feedback on the original scheme from the Jersey Architecture Commission and Planning Department. Once an implementable planning permit has been received, construction will commence immediately. It will be at this point that the acquisition funding will be rolled up into the development funding provided by the Andium Revolving Credit Facility. Due to the inherent uncertainty of the planning process and consequent impact on the construction start date, Andium have requested an extension of Loan 11 to 31st December 2022, which ensures any further time, pre-construction, is taken into consideration. The capital repayment for loan 11 will coincide with the new timetable which will be in place before the end of December 2022. In the meantime, interest payments will continue to be funded on a quarterly basis by Andium, mainly from income streams arising from the ownership of the site, e.g. car parking fees. The use and operation of the HDF allows for the acquisition and development of sites and there is sufficient capacity within the HDF to provide the loan until 31st December 2022. Although associated with a specific project, loan 11 is not collateralised solely on that project and the risk of project specific non-performance is therefore mitigated by the strength of Andium’s balance sheet.
Resource Implications: The extension of the loan will result in additional interest payments of approximately £350,000 which will be identified as income into the Housing Development Fund in 2022.
Action required: The Head of Financial Governance to notify the Head of Treasury and Investment Management once this decision has been approved. The Head of Treasury and Investment Management will provide a formal confirmation to Andium of the loan extension under existing terms.
Signature:		Position: Deputy S Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision: