SME Liquidity Fund loan agreement for Kapital Residential Ltd: FOI release

Information requested

The original loan to Kapital Residential Ltd was £850,00 secured against both Greenfield House and the Lundin Links Hotel. Both properties had lain in an essentially derelict state for a considerable time without construction work taking place. The actual market value of Greenfield House in 2021 was £200,000.

The loan is now only secured against the Lundin Links Hotel following a repayment on 23/August/2021 and a valuation.

The company does not appear to be directly involved in housebuilding as its activities are listed only as "70100 - Activities of head offices". Its accounts upto 31/Dec/2019, i.e. pre-Covid, are still overdue.

1. When was the initial loan made?

2. What was the annual turnover of the company at the time the loan was made?

3. How many homes were they completing annually or have under construction at the time of the loan?

4. What is the period of the loan?

5. Is interest charged on the loan and, if so, what is the interest rate?

6. Is there a schedule when repayments have to be made and, if so, what is it?

7. How much was repaid on 23/Aug/2021?

8. What was the valuation of the hotel that allowed the outstanding loan to be secured against it alone?

9. Was the valuer appointed by the Scottish Ministers or Kapital Residential Ltd?

10. Is Kapital Residential Ltd. directly involved in housebuilding?

11. How did Kapital Residential qualify as an SME housebuilder

12. How many employees does Kapital Residential have?

13. How many jobs did the loan to Kapital Residential secure?

Response

1. The loan agreement is dated the 23rd July 2020

2. The Scottish Government does not have the information, the applicant provided details of accounts to 31 December 2018 and 31 December 2017

3. The company stated in the application form that they planned to complete 12 homes during 2020 and had 44 under construction as of 23 March 2020.

4. The final repayment date is the last business day in July 22, which is 24 months after the utilisation date

5. The loan agreement states that interest is payable at a fixed rate of 2% per annum

6. Information withheld - disclosure would (or would be likely to) prejudice substantially the commercial interests of any person or organisation (section 33(1)(b))

7. Repayment of £150,000 made

8. Information withheld - disclosure would (or would be likely to) prejudice substantially the commercial interests of any person or organisation (section 33(1)(b))

9. Kapital Residential Limited (Chartered Surveyors DM Hall)

10. Information provided by the applicant stated that they had 44 homes under construction as of March 2020

11. Please see Emergency COVID-19 fund for housebuilders in Scotland: FOI release - gov.scot (www.gov.scot) which provides details of the application requirements

12. The Scottish Government does not have the information

13. The Scottish Government does not have the information

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have some of the information you have requested. The reasons why we don’t have the information are explained in the Annex.

While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because an exemption(s) under section(s) 33(1)(b) – Substantial prejudice to commercial interests of FOISA applies to that information. The reasons why that exemption(s) applies are explained in the Annex. 

ANNEX A
REASONS FOR NOT PROVIDING INFORMATION

The Scottish Government does not have the information
The Scottish Government does not have the information you have asked for because it hasn’t been requested.

This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information as it had not been requested as part of the application process.

An exemption applies, subject to the public interest test
An exemption under section 33(1)(b) – Substantial prejudice to commercial interests of FOISA applies to some of the information you have requested.

Section 33(1)(b) – Substantial prejudice to commercial interests - Information is exempt under section 33(1)(b) if its disclosure would, or would be likely to, prejudice substantially the commercial interests of any person. “Person” includes a public authority, company and partnership. This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption.

We recognise that there is some public interest in release because of the company’s ownership of the Lundin Links Hotel. However, this is outweighed by the public interest in protecting the commercial interests of a private company.

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