Issue - meetings

Appendix 2 to the report is in the private section of the agenda at Item 17.

The Cabinet Member for Finance, Performance and Core Services introduced a report on the opportunity for the Council to progress its plans for a major, mixed-use development at the former Sanofi site at Dagenham East, through the acquisition of further land at the site.

By Minute 13 (19 June 2018), the Cabinet had agreed terms for the freehold purchase of the two sites owned by Londoneast-uk Limited (LEUK) at the former Sanofi site.  During the course of the discussions to finalise those arrangements, it was suggested that the Council may wish to acquire 100% of the share capital in LEUK and, in effect, take over the business and its assets, which included the freehold of approximately 15.5 acres of land at the site.

The Cabinet Member advised that initial, positive discussions had taken place with the Managing Director and Chairman of the Barking & Dagenham Trading Partnership (BDTP) regarding the potential for BDTP to acquire the LEUK business as a going concern.  That acquisition could be funded by way of a commercial loan from the Council to BDTP, although it was noted that should that option not proceed it could still be in the Council’s interests to acquire the entire LEUK land interests itself. 

The Cabinet Member referred to the initial financial and due diligence work that had been undertaken, which was summarised in the exempt section of the agenda, and confirmed that a full independent valuation of the LEUK land interests and further professional advice was currently being sought.  In order to progress the matter, it was also proposed that authority to determine the preferred route and finalise all the arrangements be delegated to officers in consultation with relevant Cabinet Members.

The Cabinet resolved to:

(i)  Agree that the Council should seek to acquire LEUK’s land and business interests at the former Sanofi site, in accordance with the strategy set out in the report and subject to all appropriate due diligence, viability / value for money assessments;

(ii)  Delegate authority to the Chief Operating Officer, following consideration by the Investment Panel and in consultation with the Director of Law and Governance, the Cabinet Member for Finance, Performance and Core Services and the Cabinet Member for Regeneration and Social Housing, to determine the preferred method of purchase and final terms including, if appropriate, a working capital loan to Barking and Dagenham Trading Partnership subject to:

a)  a detailed business case;

b)  appropriate due diligence and assessments, including viability / value for money / financial / tax related implications;

c)  compliance with state aid law and principles in advancing a loan or other assistance on commercial market facing terms;

d)  legal due diligence and advice from external advisers on the corporate acquisition;

(iii)  Authorise the Chief Operating Officer, in consultation with the Director of Law and Governance, the Cabinet Member for Finance, Performance and Core Services and the Cabinet Member for Regeneration and Social Housing, to enter into all necessary agreements to give effect to the proposals, subject to a recommendation from  ...  view the full minutes text for item 57