The Great Saga Sell Off

Updated 29/12/20 @08:40

For legal reasons we could not bring you the posts we wanted to today. So instead we offer you this.

Since the announcement of Sir Roger De Haan buying up to 20% of Saga shares for a £100 million and becoming the non-executive Chairman of the company, in late August 2020, the sell off of Saga real estate has commenced due to its indebtedness.

The reported total debt Saga was carrying at the 31st Jan 2020 was £662.4 million.

Saga ditched its dividend for the year (2019/20) as its underlying pretax profit fell by 39% to 109.9 million pounds due to competition in the insurance market.

Saga criticised its former private equity owners for loading it with debt.

Saga currently have three substantial properties up for sale with Sibley Pares: – Bouverie House – Folkestone, Cheriton Parc – Folkestone, and the Call Centre – Ramsgate. The collective price to purchase these buildings between 2008 and 2013 was £14,774,000.

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Acromas Insurance Company Limited – incorporated in Gibraltar, a known “dodgy tax haven“, according to Oliver Bullough, author of Moneyland – purchased Bouverie House for £3,749,000 on 15 January 2013.  They purchased Cheriton Parc for £3,525,000 plus VAT, on the 3rd March 2009 and the purpose built Call Centre in Ramsgate for £7,500,000 on the 7th June 2013, according to land registry documents.

The current sole shareholder in Acromas Insurance Company Ltd, is Saga Mid Co Ltd based at Enbrook House Folkestone, who hold  30,000,000 million ordinary shares of £1 each, according to the latest set of account published by Acromas in Gibraltar.

Saga Mid Co Ltd is owned by Saga PLC.

Prior to being called Acromas the company was called Saga Insurance Company Ltd, according to data held on Gibraltar’s Companies House. At the time of the creation of the company in July 2003, one of the eight directors was Mr. Roger De Haan, along with the future CEO Andrew Goodsell. The Gibraltar company was set up to enable Saga to underwrite motor insurance policies for the first time and take advantage of cost-savings and tax efficiencies through the tax haven.

According to the Government website Overseas companies that own property in England and Wales, Acromas own in total twelve pieces of land/property in Folkestone and or Thanet.

All this property and land was purchased by Acromas. At the time Sir Roger had nothing to do with Saga we stress.

It was announced in August 2020, that Sir Roger De Haan had purchased 20% of Saga’s shares for £100 million and joined the board as the non-executive chairman, after the loss of 1,400 jobs.

“The company I sold was doing brilliantly well. I don’t know what happened…but (it) had certainly lost its way,” De Haan said on a call with reporters.

Bouverie House, Folkestone was built around 1977 and stood empty for nine years, before Saga purchased the building on Wednesday the 25 March 1986 for £1,250,000.

Saga purchased the building from MEPC British Airways Pension Fund and Shepway District Council who owned 20% of the building and the ground lease.

The building eventually evolved into a call centre and many residents across the district may well have passed through its doors.

On the 7th March 2013 Acromas, a subsidary of SAGA Plc, based in Gilbratar purchased Bouverie House from Saga for £3.75 million.

Prior to Dec 11th, Acromas was no doubt instructed by its sole shareholder, Saga Mid Co Ltd, to sell the building and placed it onto the market on the 11 Dec 2020.

Cheriton Parc building (15,000 sq m) was purchased by Acromas from Eurotunnel on the 03/03/2009 for £3,525,000 plus VAT according to the land registry. It went onto to become another call centre and created up to 400 jobs after Acromas purchased it.

PRS Architects were commissioned to design and fit-out a Call Centre for the Saga Group in Thanet, Kent. This was to be Saga’s second major Call Centre, and was intended as a model for future facilities across the country. The building was designed to accommodate 500 staff in the first phase with a further 250 staff in phase two. The building was completed in 2003.

Roger de Haan told guests at the official opening that the impressive new building could be extended to take between 750 and 900 employees.

Saga shares fell 71% between Jan and March 2020, capping a truly dreadful three-year run for a company which only listed on the Stock Exchange in 2014.

This brought  Sir Roger back into the picture. He was advised by Travers Smith

The Great Saga Sell Off has come about because the company’s indebtedness and cost of debt, which analysts at Peel Hunt reckon has risen from 8 to 10 per cent since March.

Debt is what has necessitated the Great Saga Sell Off so it can lower its “continuing exposure to a mountain of debt” and allow Saga’s travel business to operate through a long(er) Covid-19 disruption.

In July 2020, 300 job losses at Saga were announced. However prior to that there had been a good number of redundancies March/April 2017, Oct 2017, Dec 2017, Jan 2018 and Feb 2018.

Saga has shed approx 1,400 jobs in the last 4 financial years.

Will more assets and jobs have to go at Saga before it gets to grip with its debt?

We suspect with Sir Roger back at the helm as non-executive chairman of Saga, its fortunes will hopefully improve once again and the “mountain of debt” will dwindle, but only time will tell.

There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any people, companies or other entities included in this blog post have broken the law or otherwise acted improperly.

The Shepway Vox Team

The Velvet Voices of Dissent