Nayland Rock Hotel, Margate "mystery owner"

From a recent article in The Telegraph on Margate's wonderful Nayland Rock hotel:

"The hotel is currently without a star to its name, but that according to Carol is about to change. As of last month it has been taken over by a mystery new owner who she is yet to meet. “They are intending to bring it up to a five-star standard,” she says. “Now this place is coming back to what it was." 

No idea why the Telegraph journalist didn't just look up the 'mystery owner' of the Nayland Rock Hotel! It's on the Land Registry as being bought for £1,750,000 by the Bristol based Tower Pension Trustees Limited. This is the same company that bought the pub at 50 Marine Terrace that was then leased on the same day as purchase on a 20 year lease to the operators of Dreamland, Sands Heritage Limited.

Further, Sands Heritage Limited Directors Nick Conington and John Adams have set up a new company called Nayland Rock Hotel Margate Limited (10175490) which has a 100% shareholder, a company called Brede Hotels Limited.

Brede Hotels Limited (10077315) also has Nick Conington and John Adams as directors and a shareholder with 100% of the shares a Nicholas Graham Niell. 

Nick Niell is the boss of the Arrowgrass Master Fund, the hedge-fund that recently lent Sands Heritage Limited £600,000 secured against the Dreamland 100 year lease with Thanet District Council. Arrowgrass is stated in the recent Duff and Phelps administrator's report as now being owed £2.4m by Sands Heritage Limited. See my August 11th post on this here. Arrowgrass was according to Nick Conington's Linkedin profile his previous employer from 2008 to 2012.

Niell and Conington were both registered as the inventors of a 'Media file distribution system and method' on a UK patent in 2002,  which was owned by a company called Digifi Limited (now dissolved). That's six years before Arrowgrass was formed in 2008. A director of Digifi Limited was also John Adams of Sands Heritage Limited.

Digifi's website lists they were partnered with Hush Technologies Limited.

Hush Technologies Limited, also dissolved, has John Adams as a Director and Secretary. Mystery or confusing?

The Duff and Phelps Administrator's Report on Dreamland operators

"The Club and The Pub"

Last week, a Dreamland creditors meeting took place at the Shard Building in London. They're the unsecured creditors owed £2.9m out of a total of £8.4m by Dreamland operating company Sands Heritage Limited (SHL) The company is currently running a deficit of £14m. Many of the creditors are Thanet local and small businesses. And it looks likely they'll get a fraction of the money they're owed.

In December 2015, directors of Sands Heritage Ltd announced proposed a Company Voluntary Arrangement (CVA) and appointed Joint Supervisors CCW Recovery Solutions. The CVA document is available to download here.

The CVA stated that SHL Directors approached "certain key creditors, including KCC and Design & Build Limited to see if support could be received in principle to explore the possibility of entering into a CVA..." 

SHL then appointed administrators, Duff and Phelps, who on July 19th 2016 published their own interim report. Download it here on the Companies House website. On reading the Duff and Phelps report, a few points are worth looking at in more detail.

1. SHL took on two 20 year commercial leases, one for Escape Nightclub and one for the Punch and Judy pub, both on Marine Terrace, both on January 30th 2015.

"The Club premises located at 49 Marine Terrace, Margate, Kent, CT9 1XJ over which the Company [SHL] has been granted a 20 year lease commencing on 30 January 2015."

The Club is better known as The Escape Nightclub. It was bought by SHL boss, Nick Conington for £500,000 also on 30 January 2015.

"5.27 In addition to the lease for the Park, the Company also leases the Pub and the Club from third parties on 20 year leases which both commenced 30 January 2015."
The Administrator's Report makes no mention of the ownership of the club. It's not stated why Dreamland would need to rent a large nightclub and only mentions one sub-tenant, Phases Dance studio, which sub-leases the top floor.

The business rates valuation for the Club is £62,500 per year.  Presumably, SHL aka Dreamland were then responsible for the business rates of the Club.

The pub at 50 Marine Terrace, also purchased on January 30th 2015 and leased to SHL for 20 years on the same day, locally known as The Punch and Judy . The pub was purchased by a Bristol based pension trust called Tower Pension Trustees Limited (Company number 02178783).
The business rates valuation for the pub is £39,750 per year.

2. SHL rented a residential property in Margate's old town at Wisteria Cottage in New Street, CT9 1EG from landlords Wink Developments Limited. 
"5.31 At the appointment date, the Company also held a short term lease over Wisteria Cottage. Wisteria Cottage was not required for ongoing trading purposes and accordingly the Joint Administrators entered into discussions with Wink Developments in order to arrange a surrender of the lease. The deposit held by Wink Developments totalled £2,406 In accordance with the lease, Wink Developments were entitled to offset amounts due to them for rental arrears from the deposit held, together with any dilapidations. Following correspondence with Wink Developments, and amount of £1,153 was recovered in respect of the rent deposit."
Wink Developments Limited (Company number 09559791) is the company of SHL director, Christopher Rudgard Webster. The house, was purchased on July 17th 2015 for £183,000. The Administrator's Report makes no mention that it is leased from an SHL director, for how much or what for what trading purpose for Dreamland.

3. The Administrator's Report states that "In June 2014 the Company was successful in a tender process with TDC to operate the Park" This is incorrect. SHL weren't awarded the tender until November 21st 2014. There were two tender phases. The first in June 2014, when SHL was the only bidder. There was a second tender phase in the autumn of 2014 against other bidders. Here's the TDC announcement in October 2014.

4. "In order to achieve this , the Park was in need of significant renovation works, which commenced in Summer 2014 and had a scheduled completion date of 19 June 2015."
The timeline of events is again incorrect. SHL didn't win the tender to operate the park until November 2014 and didn't commence works in the summer of 2014. 

There is also no evidence that I've seen of a June 19 2015 opening being discussed in the summer of 2014.5. "3.9 Arrowgrass had previously expressed an interest in working with the Company"

The report makes no mention of Arrowgrass being SHL director, Nick Conington's previous employer from 2008-2012 as per his Linkedin profile.

Arrowgrass is a hedge fund offshoot from Deutsche Bank. Prior to moving to Arrowgrass.Nick Conington worked as a Managing Director of Deutsche Bank for 15 years.

6. Shareholder details:

The report lists a 22 shareholders, they include Nick Conington with 750,000 £1 shares and Christopher Webster has 50,000. Wink Developments Ltd, which is Christopher Webster's company and owns Wisteria Cottage has a further 37,500. John Adams has 100,000 shares and he's also the director of Wyck Consultancy Ltd which also has 10,000 shares.  Stephen Groom (presumably the key creditor of Design & Build Limited) has 25,000 shares. Thanet Property developer Graham Knight has 25,000 shares. Dreamland CEO, Eddie Kemsley has 5,000 shares.

7. Arrowgrass is now stated to be owed £2,400,000, which is an increase from their original secured loan of £600,000 on May 27 2016.

Dreamland lease assigned for charge to offshore company in Caymen Islands?

The Cayman Islands

There was good news from Dreamland over the weekend as it celebrated its first birthday. The park lifted the entrance fee a move met with widespread approval. But news has emerged today that an offshore company, Arrowgrass Masterfund Limited, based in the Cayman Islands has been assigned the lease to Dreamland from operators, Sands Heritage Limited on May 27th in return for the sum of £600,000. The charge document is available to download for free on the Companies House website.



The lease was signed on May 21st 2015 between Thanet District Council and Sands Heritage Limited for the Dreamland site.




Sands Heritage Limited recently went administration owing creditors just under £3m. The agreement states Arrowgrass Masterfund Limited loan is for £600,000. 



Who are Arrowgrass Masterfund Limited?Well, we don't know, because the company is registered off shore. But we have heard of Arrowgrass Capital Partners LLP and this is listed as their correspondence address in the UK.

Arrowgrass Capital Partners LLP is the hedgefund that Sands Heritage Limited boss, Nick Conington lists on his Linkedin  page as having worked for from 2008 to 2012. Arrowgrass Capital Partners grew out of the market leading convertible bond franchise at Deutsche Bank.

Source: Linkedin

Companies House records also show a further charge of £1m to Sands Heritage Limited from June 1st 2015 from a Christopher John Mahoney who is based in the Netherlands. Mahoney and Conington were both part of the winning Oxford University boat race crew in 1980.

Oxford Cambridge boat race crews 1980

Mahoney, is a retired director of agriculture trading of the world's largest commodities trading company, Glencore. A headline in the Independent stated:

"We'll make a killing out of food crisis, Glencore trading boss Chris Mahoney boasts" With Mahoney quoted:

"The environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities."We will be able to provide the world with solutions... and that should also be good for Glencore."

Surely, questions now arise:

- What does the agreement between Arrowgrass Masterfund Limited and Sands Heritage Limited mean for the future of Dreamland as an amusement park? 

- Has the future operation of Dreamland been transferred to an offshore company? What role did freeholders and funders Thanet District Council play in the transfer? 

- What role do funding partners The Dreamland Trust and the Heritage Lottery Fund play?

- Is Dreamland as an amusement park safe from being developed into anything other than an amusement park?

Post edit:
Ed Targett has also published a post