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Orbit merger talks with Swan end after ‘lengthy due diligence process’
Merger talks between Orbit and troubled Swan have ceased, quashing plans to create a 60,000-home landlord.
In a stock market update today, Coventry-based Orbit confirmed that partnership discussions with 11,600-home Swan have ceased “following a lengthy and detailed due diligence process”.
It emerged in December, on the same day that Swan was rated non-compliant on governance and financial viability by the Regulator of Social Housing (RSH), that the organisations were in merger talks.
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Orbit announced that both boards were in discussions to “form a partnership”.
On the same day, the regulator revealed that Swan has been given a rating of G3/V3, meaning it is non-compliant with the Governance and Financial Viability Standard.
It said in a judgement that there had been a “material deterioration in Swan’s financial position since its last business plan was submitted to the regulator”.
“This includes the identification of a significant adverse variance in its future development costs, largely due to the ineffective management of its development programme and its development subsidiary,” the regulator said.
Swan is currently under “intensive regulatory engagement”.
At the time, 45,000-home Orbit acknowledged Swan’s regulatory judgement and said the organisations were working together on the findings.
In May, Swan pulled out of a partnership with G15 landlord Catalyst to deliver 359 shared ownership homes on an industrial site in east London.
Later that month it emerged that it had breached the Home Standard after it was found to have around 1,500 overdue fire safety remedial actions.
