Monday, 20 October 2014

Funding costs halt merger

A merger that would have created one of the largest social landlords in the east of England has fallen through because of funding costs.

Aldwyck and Paradigm housing groups announced in May this year plans to merge their two organisations.

But today they have cited differences of opinion over possible savings and ‘significant problems’ that have halted the move.

While 12,109-home Paradigm wanted to overcome the issues, 11,000-home Aldwyck’s board decided not to go ahead.

Aldwyck released a statement saying: ‘After careful consideration, Aldwyck Housing Group’s board has decided not to proceed with a merger with Paradigm Housing Group. 

‘Our preferred option of a full merger has proven impossible to progress due to prohibitive funding costs. 

‘The board discussed a range of alternative legal structure options, none of which would deliver sufficient savings and service improvements for our customers.’

David Easson, Paradigm’s chairman, said: ‘The problems in creating a new and dynamic organisation would have been significant, but not insurmountable and Paradigm is confident that, with the right commitment, the benefits would have been substantial. However Aldwyck’s board decided not to go down this route.’

He added: ‘We are disappointed with this result as the business case was strong and a merger would have achieved significant benefits for our tenants in both organisations as well as enabling us jointly to increase the development of new homes for those in our area in housing need.

‘We recognise, however, that, to be successful a merger would have required the full co-operation of both parties.’

Aldwyck operates across the south east and east of England and supplies management services to 20,000 people.

Paradigm, previously known as Chiltern Hundreds, was the first large scale voluntary stock transfer landlord to be set up and works across the south, east midlands, and west London.

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