As part of the shortly to be announced management buyout the crippling debts that Firstport operate under had to be relieved to prevent the company falling into administration.
Once Electra decided ownership of Firstport was no longer viable and were not going to provide financial support any longer, and no outside buyers could be found for Firstport a management buyout was the very last throw of the dice.
A deal was struck which involved selling the leaseholds of residential house managers flats to an income investment fund. Due to the restriction placed on the flats, that it could only be used by a residential house manager, and the fact it was a distress sale by Firstport the average price obtained for the house manager's flats was a paltry £112,000.
Free of restrictions the average obtainable price would have been in the order of £220,000.
Residents can now expect to come under intense pressure from the income investment fund to agree to dispense with a residential house manager so that they can realise a huge profit from their "investment"
Whilst the sale of the house managers flats has afforded temporary relief to Firstport, they have effectively cashed their "chips in". They have lost their safety net. They no longer have anything to fall back on. Future losses cannot be mitigated by assets.
