Published: 10:30, 08 December 2015
| Updated: 10:47, 08 December 2015
The company running Dreamland has applied to the High Court for a voluntary arrangement to settle debts of almost £2.9 million.
Sands Heritage Limited has called a creditors' meeting for December 23, where proposals around outstanding debts will be discussed.
But, in a new twist, Thanet council this evening revealed it knew nothing about the formal arrangement with creditors.
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A statement just released said the council was disappointed Sands was entering into the arrangement - more so that it had to find out from the media!
Under a voluntary arrangement (CVA), companies can continue to trade where there is an agreement with creditors to pay debts over a fixed period.
Directors of the company have 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, the company says that if the arrangements for a CVA are agreed, it will continue to trade and operate the attraction which opened in June this year and has proved popular with visitors.
VIDEO: The company running Dreamland has applied to the High Court to settle debts.
The CVA proposes that the company will pay its creditors an initial sum of £912,992 within one week of approval of the arrangement.
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.
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.
A council report on the capital costs of the project overspend said: “The Dreamland project is one of the largest regeneration schemes the council has ever undertaken and it has been challenging due to the unique nature of the assets involved.”
In a statement, 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.”