Warrington raises eyebrows with £200m loan
The council’s cabinet approved the loan facility to an entity indirectly controlled by The Hut Group founder Matthew Moulding last year and the e-commerce firm has drawn down £152m so far, according to a report to the authority’s audit and corporate governance committee.
The seven-year, £202m loan facility, first reported by the Financial Times, was granted to Icon 3 Holdco in October.
That company lists The Hut Group’s legal director James Pochin and chief financial officer and co-founder John Gallemore as its directors.
THG was founded in 2004 by Gallemore and Matthew Moulding and is valued at more than £2.5bn. Last September, THG started trading on the London Stock Exchange after raising £1.9bn in what was the UK’s largest IPO in five years.
The Warrington loan was used to facilitate the construction of new properties for THG’s use.
The size of the loan has surprised some commentators. Warrington Council’s next biggest commercial loan facility is £30m for a solar farm in York.
A Warrington Council spokesperson said: “Our objective is to secure good quality jobs for local residents and to support the local economy.
“This arrangement is secured against assets and The Hut Group, as one of Warrington’s largest employers, has brought in a significant number of jobs locally.”
The authority is no stranger to large investments of this nature.
Last year, Warrington Council forward funded the construction of BT’s Salford hub at New Bailey to the tune of £112m, as first revealed by Place North West.
THG’s facility is secured against properties at its Icon logistics park at Airport City, where the company is also planning to create a 17-acre global headquarters featuring more than 1m sq ft of offices.
The online beauty and lifestyle retailer owns brands including Myprotein, ESPA and Lookfantastic. THG has also branched out into hospitality in recent years, acquiring two hotels in Manchester and Hale Country Club and Spa in Trafford.
THG was contacted for comment by Place North West.
Were I a Warrington rate-payer it would be the bit about ‘branching out into non-core businesses’ that would have me most worried. When companies start veering so dramatically from their main focus it rarely ends well.
By Sceptical
Interesting THG is building is HQ near Manchester airport which eventually where the jobs will go, not sure how this fits in with Warrington?
By Meeseeks
The secrecy surrounding this deal is a disgraceful example of a rogue council – run by 2 or 3 individuals . I’m sure that hard working labour councillors on reading these reports will be appalled . 200m loan to a man worth 5000 million … doesn’t play well …
By Redwood
Shows good business acumen by THG if anything.
How can WBC afford this though?
By Matthew B