A merger to rescue the housing association behind Southend’s Queensway regeneration from bankruptcy has been hampered with further delays.
Swan Housing Association was due to sign a deal with Sanctuary Housing Association last week, but while the boards of both associations have agreed the merger it is still subject to due diligence checks and the consent of third party lenders.
The merger between Sanctuary and Essex-based Swan was due to be completed on November 30.
Swan, in partnership with Southend Council, is due to deliver the £575 million Queensway regeneration scheme to build 1,700 new homes.
A spokesman for Swan said: “Swan’s proposed business combination with Sanctuary has been agreed by the boards of both organisations. The business combination between Sanctuary and Swan is subject to obtaining appropriate consents and satisfactorily concluding commercial discussions with third parties.
“A further update will be provided on the timing of the potential business combination in due course.”
The association was in merger talks with the Orbit group, but that deal fell through in October when the depth of Swan’s financial problems became known.
At the time it was announced Swan only had sufficient cash reserves to continue operating until December.
Orbit was said to have made a £40 million loan to Swan earlier this year when Swan was rated non-compliant on governance and financial viability by the Regulator of Social Housing.
Southend Council has welcomed the agreement by the two boards.
Ian Gilbert, councillor responsible for economic recovery, regeneration and housing, said: “This is very positive news.
“Although this hasn’t completed by their initial target of the end of November, it is understandable given the scale of merger. We are aware that in the interim, Sanctuary will now enter into an agreement to provide managed services to Swan.”
He added: “We are hopeful that once due diligence is completed the merger can ahead and we will be able to update residents further.”