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This question has been troubling me for a few days now. What is in this deal for White Ocean Leisure. Perhaps a more pertinent question in the first instance is who are "White Ocean Leisure"? It seems they are a new company set up to take over SLP, in fact set up just for this deal. White Ocean Leisure were born to this world on the 9th November 2007. The directors are listed as "AG Secretarial Ltd" and "INHOCO Formations Ltd", which does not help much. However, according to Companies House, there is a mortgage charge on the company from the Irish Nationwide Bank. Is this how they financed the deal? I don't know and would love to hear from somebody who does.

So, a new company less than a month old stumps up £125 million for SLP. To quote Graham Hodgson "Of the potential purchasers of our business, White Ocean Leisure was our preferred option". So Graham prefers the option of a company less than one month old (at time of purchase). Why Graham? Please do tell. I suppose nothing to do with the fact that director of SLP you potentially would have personally benefited financially from this deal. It seems to me there is more to this than meets the eye. Somebody or company (or both) must be backing White Ocean Leisure.

So anyway, on the assumption that White Ocean did not have £125 million sitting under the mattress in cash, they must have borrowed the money from somewhere (Irish Nationwide Bank maybe). Now lets assume an interest rate of 5% (below Bank of England rate but lets be generous) on £125 million is £6.25 million per year in interest payments.

Now having looked at SLP last published accounts, their turnover was just under £19 million (down from almost £21 million in the previous year) and the profit before tax was around £2 million (down from over £5 million the previous year). Looking at this what on earth has possessed this one month old company to buy SLP.

So lets look at the assets of SLP. Fixed assets (i.e. land, buildings etc.) are valued at £65 million (down from almost £78 million). Current assets are nearly £23 million, including £20 million owed to them by somebody. On the debit sde, SLP have liabilities of over £5 million due this year and £26 million beyond that. The bottom line is that SLP's net assets are just £55 million.

Now I am not an accountant, and the figures might make sense to somebody, but they don't to me. For the life of me I can't see why anybody would pay £125 million for SLP.

All this suggests to me is that things are unlikely to get better as White Ocean will be looking to extract as much cash from SLP as they can just to service the debt. Of course the alternative is that they may split the whole group up as the sum of the parts may be greater than the whole.

Don't forget the SLP forum
http://southlakelandowners.freeforums.org/index.php

Regards
Kevin