DENBIGHSHIRE Council’s leisure company has blamed councillors “determined to generate unnecessary negative publicity” for the collapse of a planned buyout of the firm.
River Capital, a subsidiary of the Merseyside Special investment fund (MSFI), had planned to complete a £1.5m purchase of Denbighshire Leisure Ltd (DLL) after councillors voted behind closed doors to sell the council asset.
DLL runs eight leisure centres, the SC2 Water Park in Rhyl, the 1891 Restaurant and Bar at Rhyl’s theatre, Rhyl Pavilion Theatre, Rhyl Town Hall, North Wales Bowls Centre, Nova in Prestatyn, and Ruthin Craft Centre and its Cafe R eatery, employing well over 500 members of staff.
Whilst the buildings would have remained in council ownership, the running of the services would have been transferred.
But some councillors raised concerns after a behind-closed-doors vote for the deal, with Cllr Gwyneth Ellis resigning from the cabinet in protest at the move.
Several councillors then said they had concerns over a lack of information about future growth, the shareholdings for staff, the loss of control of leisure services, and the privatisation of the company.
Now River Capital has pulled out of the deal, the council says.
In response to the news, a spokeswoman for DLL said: “Despite the decision being made by full council, who were following the correct democratic process, a couple of elected members of DCC were determined to generate unnecessary negative publicity by leaking confidential information and misrepresenting the position to the press.
“Based on this, the investment fund supporting the MBO [management buyout] has taken the decision to withdraw from the deal.
“This is massive investment opportunity lost for DLL and the residents of Denbighshire.
“DLL remains committed to providing the best services for Denbighshire and beyond, and this bump in the road may hold us up temporarily in our pursuit to safeguard our exceptional services in Denbighshire long into the future, but it won’t stop our long term plans.
“We will now take some time to consider our options with the council, with further announcements to follow over the coming months.
“In the meantime, DLL will be focusing on the immediate, which is providing an exciting summer of activities and developments for our residents and visitors.
“And in true DLL style, we have numerous exciting projects and announcements in the pipeline which we will be sharing in due course.”
Cllr Gwyneth Ellis said she was pleased the deal had fallen through.
“I’m glad that the proposed privatisation of DLL will not be going ahead,” she said.
“As a council and as councillors, we should learn lessons from this.
“We should now look at Denbighshire Leisure to see if changes are needed to the way it operates.
“If councillors become convinced that changes are needed, options should be discussed transparently and in the open, with all councillors having ample time to form opinions and ask questions.
“The most important thing is to protect the leisure service, which is an asset owned by the people of Denbighshire.”
Rhyl councillor Brian Jones said he hoped the council would work with DLL to look at alternative arrangements.
“It’s disappointing to hear that the investor has pulled out of the potential deal with Denbighshire Leisure,” he said.
“My hope now is that the senior leadership of Denbighshire County Council along with the senior leadership at DLL will come together very soon and come up with a plan that will secure the leisure facilities and other offers across the county as soon as possible and bring some stability back to this matter, which has been a bit traumatic for a number of people.”
A Denbighshire County Council spokeswoman commented: “We’re disappointed to inform you that the investment opportunity in Denbighshire Leisure Ltd, which the council agreed in principle on 26 March, will now not be progressing as the investor has decided to withdraw the offer.
“The primary purpose of this proposal was to secure a sustainable future for leisure services for Denbighshire residents, and the council and DLL will continue to work together to explore other opportunities to achieve this.”
She added: “We remain committed to providing the best services for Denbighshire and to safeguard our exceptional leisure services long into the future.”
