Business / HIE loan not repaid as company goes into liquidation
FACILITIES management company Shetland FM Ltd has gone into liquidation – with a £610,000 loan to Highlands and Islands Enterprise (HIE) still outstanding.
Frank Strang, who owns the company with his wife Debbie Strang, said Shetland FM effectively ceased trading when it lost its contract to run the Sella Ness accommodation facility last year.
He said as “there was no likelihood of picking up any more oil and gas related business, and thus no revenues, we had a fiscal obligation to wind the company up”.
While “all local suppliers were paid in full” after the company ceased trading, a loan from HIE was approved in 2017 to help Shetland FM restructure its debt remains outstanding.
The £610,000 loan was secured against Saxa Vord Resort in Unst and 17 self-catering houses at Nordabrake which sit alongside the property.
Strang, who is also a director of the proposed Shetland Space Centre, suggested it would be “highly unlikely” that ownership of the properties would transfer to HIE, which has been “very supportive on all counts” and remain in “continuous dialogue”.
He said all matters relating to the loan would be dealt by the liquidator.
The businessman added that while the property is owned by Shetland FM, Shetland Space Centre leases it under an “irrevocable long term lease with an option to buy”.
That option has been exercised by the space centre board, he said, and the matter will be discussed with the liquidator.
Strang aded that Saxa Vord “is still open for business and will continue to be open for business to support the Unst economy” for many years to come under the current ownership, which also includes Debbie Strang and its management team.
HIE director of service delivery Rachel Hunter said the government-owned economic development agency will be “treated in a similar way to any other commercial creditor” during the liquidation.
“We provided the company with a loan in 2017, on commercial terms and with security,” she said.
“This means we will be treated in a similar way to any other commercial creditor during the liquidation process, in terms of receiving payment for outstanding debts through sale of the company’s assets.”
Strang, meanwhile, confirmed that all staff on the company’s books were transferred through the TUPE process to new Sella Ness operators Sodexo last year, with no job losses.
Hunter commented that Shetland FM has been “inactive for some time and fortunately there are no employees affected by its liquidation”.
Strang said the liquidation process would not have an impact on other companies he is involved in.
“It does not affect and will not affect the Shetland Distillery Company which continues to grow and the Shetland Space Centre which is going from strength to strength,” Strang added.
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