Highbury College takes out £1m loan while it battles to recover £1.4m from Nigerian state
COLLEGE bosses offered up its students’ halls as security for a £1m loan while it battles to recover a £1.4m debt abroad.
Highbury College offered several floors of its campus tower in Cosham as security for the bank loan – taken out to pay for new kitchens.
The institution, led by principal Stella Mbubaegbu, said its financial health is rated as good but colleges face major cuts while costs have risen.
Records from its wholly-owned subsidiary firm Highbury College Commercial Services Limited show the loan from swedish bank Svenska Handelsbanken AB was put in place in August.
Floors six to 10 of the block, used to house students, is being held by the bank as a security for the loan.
A college spokeswoman said: ‘To finance improvements, including the recent installation of the professional training kitchens, a loan of £1m was acquired and, as standard, security was provided to the bank. The security in this instance was against part of the existing estate, the tower.
‘Students can only benefit from such investment.
‘The college continues to provide student accommodation in the tower.
‘The college is permitted to gift aid funds from the wholly-owned subsidiary company Highbury College Commercial Services Ltd to Highbury College. This is standard practice.’
As reported, the college is fighting a legal battle to recover £1.4m owed by the Cross River State Government in Southern Nigeria for work in the country.
She added: ‘Over the last decade, colleges across the country have seen government funding cut by an average of over 30 per cent whilst experiencing significant increases to costs over that same period.
‘Despite this continued under investment into the further education sector Highbury College’s financial health is rated “Good” in accordance with the Education and Skills Funding Agency financial health assessment criteria.’
Accounts show the college’s services firm has seen a drop in cash held in the bank and at hand from £88,899 in 2016 to £1,901 in 2018.
Profit dropped from £101,949 to £48,263 in the same period.