Sidbury Community Enterprises’ share offer has concluded after running for 5 ½ weeks. During this time it distributed share prospectuses across the whole of Sidbury. It also held two public open days in Sidbury village hall where it displayed the refurbishment plans that it had worked up for a future Red Lion business and were able to discuss the detail of the share offer with those who attended. In total around 150 people attended the Open Days and provided great positive feedback on the plans.
Sidbury Community Enterprises’ Chair, Fred Burnett, said “It has been most heartening to have received investments from more than 150 investors who have provided in excess of £100,000. We are incredibly proud to have raised so much money from such a large number of investors in a relatively short period of time. This, we believe, demonstrates that our vision for retaining the Red Lion has significant support. We always knew that our target to raise £200,000 through the share offer was challenging to say the least”.
Sidbury Community Enterprises business plan and the premise for the share offer required it to raise at least £200,000. As it did not manage to fully raise this amount through the share offer the Management Committee this weekend met to consider how to respond.
The Management Committee reaffirmed that it would only proceed to purchase the Red Lion on the basis of the proposals as set out in its vision statement and in the share offer prospectus. This means that it needs to raise around £133,000 from a mortgage and around £200,000 through shares, short term low loan(s) and donations. In its opinion it do not believe that a viable business could be created from significantly less a total investment.
For this reason it is, at this stage, unable to immediately move to purchase the Red Lion. It is however proposing applying for a non-refundable capital grant from Social Investment Business, which is a government funded organisation that supports social enterprises such as Sidbury Community Enterprises. This grant has only become available since it launched its share offer. It proposes applying for a grant of at least £100,000, which is the least that can be applied for, in order to make up the shortfall in the funds that it raised through the share offer.
If it is successful in obtaining this grant it would not be paid out until mid September. This would however allow it the opportunity to continue to seek additional investors who could purchase shares or provide it with donations.
None of this alters its business plan or vision for a future Red Lion business. It does however mean that the timetable for Sidbury Community Enterprises to purchase the Red Lion would slip until September.
The Management Committee also reaffirmed that should it fail to raise a total of around £200,000 from shares, donations and the grant then it would at that point determine that its attempts to purchase the Red Lion had failed. It is not prepared to try to purchase the pub, refurbish it and start trading on a budget that will not deliver a viable business.
Sidbury Community Enterprises has written to all those who invested to seek their agreement to this approach. It has determined that it will not cash any investments that have been made either through cheques or on-line until it is clear that it has the full amount of funds required to commence a viable business. It is however confident that its investors will agree with its approach and continue to demonstrate the faith that they have shown in the business plan and proposition to create a community pub in Sidbury, which their investment.