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Sanctuary completes Swan rescue merger
Sanctuary’s rescue of troubled housing association Swan has finally completed after weeks of delay.
The 11,000-home Swan, which is currently non-compliant with the English regulator, has officially become a subsidiary of 105,000-home Sanctuary.
Essex-based Swan will continue to operate as a standalone operation as “future integration plans are discussed”, the landlords said today.
The tie-up was originally been due to complete on 1 December, but was delayed by discussions with bondholders of a £250m finance package amid Swan’s failure to file to its annual accounts.
Sanctuary stepped into the breach last September after Swan’s long-running merger talks with Orbit collapsed.
Swan has faced severe financial difficulties, with Standard & Poor’s warning last November that the landlord needed external support to “remain a viable business”.
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At the same time, Swan said it only had enough cash to fund its subsidiaries until “early December”. It saw Sanctuary agree a £50m loan for Swan.
Craig Moule, group chief executive at Sanctuary, said: “As one of the largest providers of social housing in the country, Sanctuary is financially strong, well-run and has the experienced team in place to help Swan manage its challenges.”
Susan Hickey, interim chief executive at Swan, is stepping down from the association as a result of the merger. She was appointed in December 2021, just days after the landlord was handed a non-compliant G3/V3 rating by the Regulator of Social Housing.
Ms Hickey will be replaced by David Soothill, who was previously Sanctuary’s development director in England and will now become managing director of Swan.
Mr Moule added: “Susan has worked diligently to secure Swan’s future. I’d like to extend my thanks to Susan for her hard work and commitment to Swan’s residents and employees.”
The financial problems at Swan follow a number of ambitious development projects the landlord had taken on over the past few years.
In 2017, Swan replaced L&Q on an £800m scheme in Essex to deliver up to 2,850 new homes, with around half using modular construction.
In October 2020, Swan entered into a 15-year agreement on its second modular factory. The association partnered with Panattoni, the largest developer in Europe, on this factory in Basildon, which was expected to deliver 1,000 homes each year.
At 116,841sqft, the new factory is considerably larger than its first, which was opened in 2017 and covers 75,000sqft.
But in December, it was announced that Swan will close both of its in-house modular housing factories after revealing they had struggled to make a profit.
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