Sanctuary and Swan boards give green light to merger

It comes after the Essex-based landlord, which is currently non-compliant with the regulator’s standards, last week agreed a £50m secured loan from 105,000-home Sanctuary to give it “additional liquidity”. 

Swan last month revealed that it was facing a potential annual impairment of £178.4m and had £24.3m in cash, which it said would only fund its subsidiaries until “early December”. 

Standard & Poor’s downgraded Swan the same day to a BB- rating. The credit rating agency said that the 11,500-home landlord’s financial position had “deteriorated rapidly” and that it required external support to “remain a viable business”.

At the time, Swan said it had “encountered significant challenges during the year in its commercial operations, including cost overruns and delays to works leading to slower sales”. 

Sanctuary formally began discussions with Swan regarding a merger in late September as the Essex-based landlord’s talks over a proposed tie-up with Orbit collapsed after 10 months. 

Swan was handed a G3/V3 rating last December as the regulator said there had been a “material deterioration in Swan’s financial position since its last business plan was submitted”.

The landlord was also found to have breached the Home Standard in May this year after around 1,500 overdue fire safety remedial actions were discovered.