Pyramids firm begs for cash to pay off loan

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THE COMPANY in charge of Southsea's Pyramids could be kicked out as its deal to refurbish the leisure centre teeters on the brink of collapse.

Southsea Community Leisure Ltd has gone to Portsmouth City Council to ask it to lend the company almost 400,000 to help it meet 14 monthly repayments on a 2m loan it took out to set up the project. It comes after the council last month agreed to meet December's loan payment of 28,389.

The council is set to refuse the request but is a guarantor on the loan so it will end up paying the 2m anyway if SCL cannot meet payments. In a bid to stave off that situation, the city council is to discuss whether to set up a new trust to help bring in investment.

A report by financial director Roger Ching, due to go before the councillors next week, says: 'No further support should be provided to SCL while the current trustees remain in place. The council should ensure continued and successful operation of the centre via a trust model.'

City council leader Gerald Vernon-Jackson explained: 'We're guarantors on the loan, and if the company is unable to repay it, as seems to be the case, we'd have to. SCL asked us for a loan we aren't going to make.

'Our options are to continue to support SCL, get someone else in to run it, or The Pyramids closes.'

SCL took over the leisure centre in Clarence Esplanade in March last year.

It signed a 25-year lease and took out the 2,069,304 loan to pay for refurbishment work. But the work, including a new gym, swimming pools and spa facilities, was delayed by several months last year.

Cllr Vernon-Jackson added: 'They want us to pay to the end of March 2012. The refurbishment's wonderful and we'll work with them any way we can.

'We want The Pyramids will stay open. It seems the most reliable and cheapest way is to set up a new trust.'

SCL managing director Gary Milne said: 'We had cash-flow problems and asked the council to lend some money. It happens to start-ups, especially in economic downturn, but it would be a loan, which we'd pay back.'

SCL had agreed with the council it must have 350,000 working capital to ensure it could run The Pyramids. But in April 2010, its primary investor walked out, leaving it with just 170,000.

Trustees Mr Milne and Simon Jervis hoped to secure an overdraft of 100,000-130,000, but were refused when Mr Jervis' firm Urban Renaissance Bar Ltd went into administration. But Mr Milne said: 'We're doing great things.

'We took 7,000 through the swimming pool alone this weekend, almost unheard of in a January weekend.

'We have 650 members already. We're a not for profit company, neither Simon or I take a salary. We're dedicated to The Pyramids and hope to continue here.'