A Company Voluntary Arrangement (CVA), will allow this famous seaside attraction to continue trading and exit administration.
This move has received unanimous support from creditors and an extremely positive response from the public.
What is Dreamland?
Dreamland is a pleasure park based in Margate. Filled with amusement arcades, rides and rollercoasters it is your archetypal British seaside funfair.
A popular retreat for Londoners, this enterprise has been going in some shape or form since the 1880s, however it was not known as Dreamland until the 1920s.
The park is now operated by Sands Heritage Limited, while the land is owned by Thanet council.
Why did it move into administration?
Sands Heritage put the company into administration in August 2016. Duff and Phelps were appointed administrators, and kept the park open while they assessed the state of the business.
Cashflow was said to be poor as the park lacked finance for improvements and was no longer attracting visitors from outside of the local area.
This left many of its creditors – including the local council and some small Thanet-based businesses – uncertain about whether they’d receive payment.
Sands Heritage was given five years to pay the £3m debts, but when it became evident that it would still be unable to pay, the company decided to move into administration.
However, during this period, Dreamland’s major stakeholder Arrowgrass injected £25m into the business. This allowed for renovation work and the re-imagining of the entire park.
Before it re-opened on the 26 May 2017, it was re-landscaped, the vintage rides were meticulously restored and several street-food stalls and eclectic bars were put in place.
A new 15,000-seat venue for live entertainment acts was also built. The weekly sunset sessions were a hit, but the Demon Dayz festival (headlined by Gorillaz) really turned the fortunes of this adventure park around.
Over the 2017 summer period, Dreamland saw over half a million visitors come through its doors. Many more than had visited in several years.
How does the CVA work?
Thanks to the CVA, Sand Heritage will exit administration at the end of October and Dreamland will continue to trade as normal.
A CVA means that the creditors and company have agreed to a repayment of all, or part, of its corporate debts over an agreed period.
However, this comes very recently after a BBC report claimed creditors were estimated to receive just 25% of what they were owed. It is not yet clear what has been agreed, however the majority of unsecured creditors must have agreed for the CVA to go forward. Read this page on exiting an administration via a CVA
Steven Mitchell, Interim CEO at Dreamland, said:
“The successful exit from administration is the perfect end to a hugely successful summer for Dreamland Margate.
"Our team has worked hard to deliver massive improvements in the range and quality of the park’s offering for half a million people but this is only the start.
"As we come out of administration, we can look forward with real confidence and excitement as we deliver more of the unique, colourful and unexpected experiences that our customers have come to know us for already this summer."
This is great news for the entire area; Councillor Wells, the Leader of Thanet District Council stated:
“This is positive news and all part of the ongoing success of Dreamland.
"The park has successfully increased tourism, played a pivotal role in revitalising the local economy and boosted the wider regeneration of Margate."
Worried about poor cashflow? How to win new work? How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide was written pre Covid-19 and there are some likely changes to insolvency rules regarding wrongful trading. Please see this page here.