Published: 11:00, 23 December 2015
The company running Dreamland has bought itself extra time to pay off debts of almost £2.9 million.
Sands Heritage Limited called a creditors' meeting for today, where proposals around outstanding debts were discussed.
It laid out a voluntary arrangement (CVA), meaning it could continue to trade if creditors allowed it to pay debts over a fixed period.
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And at the meeting today, 98% of the creditors agreed that the arrangement was the best way to pay off the debts.
Directors of the company formally applied to enter into a CVA as they say it is not in a position to meet its liabilities “as and when they fall due.”
Under its plans, it will continue to trade and operate the attraction which opened in June this year and has proved popular with visitors.
The CVA proposes that the company will pay its creditors an initial sum of £912,992 within one week of approval of the arrangement.
VIDEO: Creditors agree Dreamland rescue deal
It says that money has become available following the settlement of a dispute with Thanet council in November.
The full sum owed of £2.9 million will be paid within five years, according to the agreement.
Speaking after the meeting, Stephen Groom from Design and Build, who did most of the construction work, said he was pleased everyone would be paid within five years.
He added: "It's a long time to pay back the money, but it's support for the community.
"It keeps the park going, and you've just got to go with it."
He said he didn't feel let down by the company, but by those supporting it.
In documents submitted to the High Court, the company says it proposes to continue to trade under the control of its directors “to enable it to make 23 contributions from trading profits to a CVA over a period of 60 months, which it is anticipated will be sufficient to enable all creditors to be paid in full”.
The documents say the company operates with a reduced turnover in winter and relies on building up reserves during the summer.
Because of this, the company says the first contribution from trading profits “will be made within 18 months of approval of the CVA.”
The document says trading was affected by the closure of the park for 17 days shortly after it opened to complete work. It also cites the failure to have the scenic railway open.
The operator also states that Operation Stack and the temporary closure of Alton Towers led to fewer visitors after a high profile incident involving one of its rides.
The news comes after Thanet council reported in September that there was a £2m overspend on the capital costs of the attraction.
In a statement earlier this month, Sands Heritage chief executive Eddie Kemsley said: "We are working together with our creditors in respect of a Company Voluntary Administration (CVA) under the terms of which we expect creditors to be paid in full over the five year term.
"We are able to draw a line on a series of delays and late investments that have hindered our intentions to provide the best all-round experience for all of our visitors.
"We are grateful to all of our creditors for their understanding, support and patience and we look forward to continuing to develop fruitful relationships with them and adding to Thanet’s tourism industry."
But a Thanet council statement revealed the authority only found out about the creditors' meeting from the media.
It said: "We are disappointed to find out that Sands Heritage Limited are entering into formal arrangements with their creditors, particularly as we discovered this through the media rather than being informed directly by them.
"We want to clarify that this is a matter for Sands Heritage Limited and not Thanet District Council.
"Allegations reported in the media that we have breached contracts are strongly denied.”
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