MD1400 Barking Riverside – Contingent Liability
Barking Riverside Limited (BRL) is a joint venture company (JV) between GLA Land & Property Ltd (GLAP) and Bellway Homes plc (Bellway), each owning 49% and 51% of the shares respectively. In order to guarantee the early delivery of a secondary school at Barking Riverside, BRL has agreed to prepare the development platform for the school in advance of the requirement under the S106 agreement. On this basis London Borough of Barking and Dagenham (LBBD) have agreed to lend BRL the funds required to cover the cost of the works until the trigger under the S106 agreement is met. LBBD require a Parent Company Guarantee (PGC) in respect of BRL’s obligations under the loan which Bellway are prepared to provide but only on the basis that the GLAP will meet 49% of any liability incurred under the guarantee. This will create a contingent liability for GLAP.