The States of Jersey Development Company Ltd: Approvals relating to the construction and funding of Jersey International Finance Centre Building 6

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A decision made on 18 October 2021

Decision Reference: MD-TR-2021-0117

Decision Summary Title:

The States of Jersey Development Company Ltd: Approvals relating to the construction and funding of Jersey International Finance Centre Building 6

Date of Decision Summary:

15 October 2021

Decision Summary Author:

Head of Shareholder Relations

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

The States of Jersey Development Company Ltd: Approvals relating to the construction and funding of Jersey International Finance Centre Building 6

Date of Written Report:

15 October 2021

Written Report Author:

Head of Shareholder Relations

Written Report :

Public or Exempt?

Exempt

Articles 26 and 33

Subject:

The States of Jersey Development Company Ltd (“SoJDC”): Approvals relating to the construction and funding of Jersey International Finance Centre Building 6

Decision(s):

The Assistant Minister for Treasury and Resources decided to confirm that SoJDC may -

enter into a JCT 2011 Design & Build contract with a Main Contractor;

enter into funding agreements with HSBC to be split between a Development Loan and a Revolving Credit Facility (“RCF”), the exact split to be confirmed once determined with both facilities to expire 30 September 2024; and

utilise certain property assets of SoJDC as security to support the funding.

The approval to be subject to the following conditions: -

that the anchor tenant enters into an Agreement to Lease for the agreed floor space of over 70% of the building and car parking spaces on terms materially the same as those set out in the Heads of Terms and a copy of the Agreement is provided to the Shareholder; and

that, once the Main Contractor is appointed, a further review is undertaken of the finances and experience of the selected contract along with the tender evaluation report.

Reason(s) for decision:

The Minister’s prior approval is required for SoJDC to enter into external financing and charge its property assets is in accordance with Article 27 of the Company’s Articles of Association and in accordance with paragraphs 13.1 and 17.1 of the Memorandum of Understanding with SoJDC.

The Minister has delegated to her Assistant Minister certain functions, pursuant to MD-TR-2019-0120 and R.1/2020, including the Minister’s responsibility in respect of the States-owned entities, including SoJDC, in accordance with Article 53 of the Public Finances (Jersey) Law 2019.

An updated MoU is in the process of being agreed but has not yet been approved and executed. The draft new MoU requires SoJDC to seek approval prior to creating “any mortgage or security interest, other than any arising out of operation of law or arising by prior agreed limits, over any of the Company’s assets”.

A third-party assurance review has been completed and has not identified any matter which raises risks which cannot be mitigated or addressed by SoJDC.

Resource Implications:

There are no additional resource implications, financial or manpower as a result of this decision for the Government of Jersey. The costs of development of the Site will be borne by SoJDC.

Action required:

The Head of Financial Governance to notify the Head of Shareholder Relations once this decision has been approved.

The Head of Shareholder Relations to advise the Chief Executive Officer and Finance Director of SoJDC that Ministerial approval has been provided to the entry by SoJDC into a contract with a main contractor, to enter into funding arrangements for the development and to use SoJDC assets as security to support the funding.

Signature:

Position: Deputy L. Ash, Assistant Minister for Treasury and Resources

Date Signed:

Date of Decision: