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First Priority strikes deal with creditors
Struggling housing association First Priority has declared “business as usual” as it struck a deal with its creditors, Inside Housing can reveal.
The association’s creditors have agreed to a Company Voluntary Arrangement (CVA), a procedure that allows an insolvent company to pay its creditors over an agreed period of time.
Social Housing previously revealed that the association was in talks with its creditors over this kind of arrangement.
First Priority had been struggling with its finances, with the Regulator of Social Housing criticising it for a “fundamental failure of governance” in February.
The regulator said it did not have “sufficient working capital” or the capacity to meet its debts and it “continue[d] to trade on the goodwill of its creditors”.
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It does not own any homes itself but leases them from city investors, usually at inflation-linked rents.
At the time of the censure it had 700 tenants, but since then investors including the real estate investment trust Civitas and the investor Funding Affordable Homes have transferred their leases to other housing associations.
It brought in corporate rescue specialist Begbies Traynor and consultancy firm Grant Thornton as internal advisors.
The remaining landlords and creditors have now voted to allow a CVA, enabling the organisation to remain in a more robust financial position.
John Higgins, chief executive of First Priority, said: “Our tenants are our number one priority and our ongoing focus is now on providing a high-quality service to them. We’re working with a number of in-house maintenance technicians and housing managers across the UK to ensure a high standard of repairs, maintenance and general services.
“We remain in regular contact with the regulator and have worked hard to ensure that all our tenants keep their homes within our sector.
“It’s business as usual and this outcome means we can keep delivering the services our tenants rely on.”
Update: at 14.54 on 19.7.18 This story was updated to refer to Social Housing’s previous story about a CVA.
