QUESTIONS were being asked this week as to why Somerset Council was continuing to offer a 200-year lease on Watchet Marina when its parent company was being wound up by administrators who declared it had £16 million estimated debts and only £2 million in assets.

The Free Press reported last month how the Marine and Property Group Ltd (MPG) and two of its marinas in Wales had been put into administration and HMRC had started winding-up action in the High Court against a third harbour.

This week, MPG administrators Damian Webb and Christopher Lewis released a report on what they had found to date and said they had started a process to sell the company and its assets.

The sale, which they estimated would take four to six months, appeared to include Watchet Marina, although the West Somerset harbour was owned by a MPG subsidiary which was not technically in administration.

Because of the ‘technicality’, Somerset Council’s interim head of regulatory and operational services Jonathan Stevens has told Watchet boat owners and businesses the process of assigning the lease would continue.

Mr Stevens said MPG had provided ‘proof of funding’ to the council which would ‘fully clear the group’s debt’ and the company would ‘emerge solvent’.

He said although there were reports of MPG selling its marinas, this would not include Watchet because it was not being put into administration.

However, Watchet unitary Cllr Rosemary Woods said: “A lease is out of the question when you look at what is going on with the wider marina ownership.

“If the company behind it is mired in debts they cannot pay, have not even paid their staff or taxes properly, and have administrators trying to sell off all their assets, then how on earth can Somerset Council justify handing over Watchet Marina?

“I am seeking answers urgently from the council’s executive about how much they know of what our officers are negotiating with the marina people and why they have not put a stop to it.

“The people of Watchet deserve to have somebody who will invest in the marina, carry out the dredging which has frequently been promised but rarely delivered, and will maintain it as a first-class attraction for our town.”

West Somerset MP Ian Liddell-Grainger called for ‘an immediate halt’ to negotiations over the marina’s future management.

Mr Liddell-Grainger it would be ‘dangerous and reckless to proceed’, given the current state of affairs.

He said: “A 200-year lease would represent virtually the only asset of any value associated with the marina, but once it was signed the council would lose all control over the future management.

“That lease could be bought by anybody - and that could spell serious problems subsequently for the local authority, for the boat owners, and for the local community.

“The marina itself is a huge asset to Watchet and no decision should be taken on its future management without the fullest consultation with local people.

“Somerset Council is a new authority and probably has few, if any, officers with experience of managing harbours and marinas.

“But it simply cannot do a hasty deal now just for the sake of getting Watchet Marina off its books, however convenient a way out that may appear from a very difficult and challenging situation.”

The administrators said they had been appointed by creditor TAB London Ltd, which provided more than £13 million funding to MPG last year.

TAB acted to protect its position after a refinancing deal being negotiated by the company’s sole director Christopher Odling-Smee was delayed, precipitating insolvency for MPG and two of the marinas in Wales.

Mr Webb’s report revealed MPG had been underfunded for more than 18 months, and its accounts were up to date only to May of 2022 because the company no longer had a finance team in place.

It had been able to trade in that time by using funds which were owed to creditors and more than £146,000 in unpaid staff wages.

He said there were historic arrears to HMRC of £1.8 million accumulated over the Covid period and which were now anticipated to be ‘significantly higher’.

HMRC had issued a winding-up petition which it put on hold pending the now-failed refinancing deal, and there had also been separate HMRC winding-up actions against the group and some subsidiaries.

Mr Webb said investigations showed that Watchet and Burry Port, in Wales, were loss-making at a ‘contribution level’ and dredging in Watchet and Burry Port was uneconomic.

He said: “As the group has been loss-making and is under-capitalised it has managed trading by deferring payments to creditors, staff, suppliers, finance creditors.

“These deferrals are now leading to aggressive creditor action with High Court enforcement officers visiting sites daily.”

Mr Webb said the parent company owned 100 per cent of the shares in Watchet Marina and the four Welsh marinas, but because of the group’s financial position the shareholdings were likely to realise only a minimal value.

He said the end result of the administration was proposed to be the company’s dissolution, although it was possible it might be liquidated by creditors.