Shetland Leasing And Property (Slap) was to start legal proceedings to remove long-established marine engineering firm HNP from its Lerwick premises this week, after refusing a bid by the HNP to buy the site.
HNP Engineering managing director Ian Walterson said that the fate of the company and its 16 full-time employees is hanging on the outcome.
If his advice is not to defend the action he will have to look very carefully at winding up the business which has operated from its present base since 1974, he announced at a press conference at the Commercial Road base today.
Slap, which is a fully-owned Shetland Charitable Trust subsidiary, is understood to be in the process of selling the site to Chester-based Cityheart, the firm contracted by the University of the Highlands and Islands to build student accommodation for the Shetland College.
Shetland MSP Tavish Scott also called on Slap to review its sale and questioned the role of the UHI in the deal.But the property firm denied any bias in its dealings and said that it had tried over a lengthy period to assist the engineering firm to locate to alternative accommodation.
Mr Walterson received a letter from Slap’s representative’s Harper MacLeod dated 11th December to say that legal proceedings would be started to remove HNP this week.
He said that it would be terrible to receive such a blow at any time, but the uncertainty facing his workforce would now overshadow their Christmas.
He added: “I think it’s rubbing salt into the wounds. It is pretty poor and I think it was done deliberately. This has been a huge shock and it has certainly not done me any good.”
Mr Walterson says that not only is the UHI development unsuited for Commercial Road, which mostly houses retail and trade properties, but Slap’s handling of the situation flies in the face of its public commitment to trust, openness and transparency and of the charitable trust’s commitment to “benefit the inhabitants of Shetland”.
Mr Walterson, who was a successful whitefish skipper before taking on the business, said at the press conference this morning that he understood that Cityheart had only put in a vague, indicative bid before the 25th September closing date and that Slap had continued negotiating with them after that date.
He said that two other local firms along with HNP had been in the running – one had dropped out and the other put in a lower bid. Slap had also asked him to raise HNP’s bid, which he did so, as there was “not a great deal” separating the original offers. He said it was six weeks after the closing date that he was told HNP’s bid had failed.
I think it’s rubbing salt into the wounds. It is pretty poor and I think it was done deliberately. This has been a huge shock and it has certainly not done me any good. IAN WALTERSON
He added: “I would think that an 80-bed accommodation block with recreational and catering facilities might struggle to get planning for the site, and there is no parking space.”
Mr Walterson said it would be more appropriate for Shetland College to look at the two student accommodation blocks, Bruce Hostel and Janet Courtney Hostel, that will be vacant once the Anderson High School moves to its new site at Clickimin.
Shetland MSP Tavish Scott said that he was very concerned over the future of “this essential marine engineering business”.
Mr Scott added: “16 local people face uncertainty. HNP work for the fishing, salmon, mussels and oil industries. They look after SIC ferries.
“I want to know what role the UHI PFI (private finance initiative) deal to build an accommodation block has in this? Did the UHI, a publicly-funded university, pay more for the Commercial Road site than HNP offered? Is it right for Slap to sell this site from under a tenant who has made a reasonable offer? It cannot be good for Shetland to put the future of this company in question. Slap should review this sale. After all there will be plenty of sites for student accommodation when the AHS moves to Clickimin.”
Mr Walterson, who started as a partner in the business in 1996 and now wholly owns it, questioned how many of the charitable trustees knew of their subsidiary’s plans to oust an engineering firm with an important role in servicing local industry including the SIC’s ferries.
Mr Walterson added: “The charitable trust really needs to put the brakes on this and take stock. Slap seems to be a company that are answerable to no-one – and they seem to be out of control.”
Slap chairwoman Susan Groat, speaking through PR firm Platform Shetland, said: “The sale of the land at Commercial Road was a decision by the board of Slap, a private limited company.
“We would strongly deny allegations by HNP Engineers (Lerwick) Ltd that we have shown bias in the handling of this matter.
“Slap has invested a significant amount of effort over a prolonged period to assist HNP to find alternative accommodation, but the company has chosen not to pursue any of these options.”
We would strongly deny allegations by HNP Engineers (Lerwick) Ltd that we have shown bias in the handling of this matter. SUSAN GROAT
HNP, which was founded in 1969, took a 30-year lease on the site of its present building, housing workshop, store and offices, in 1974. This expired in 2004 when the original site owners Hay & Co (later John Fleming and Sons) sold the site to Slap in a deal Mr Walterson said was kept secret until Slap took over.
After that, HNP’s lease had only been renewed on a yearly basis until, he says, Slap started ramping up the pressure on the firm to vacate around a couple of years ago. It was his understanding that HNP did not fit the profile of what Slap wanted for the area. LESS, which rented the neighbouring building fronting Commercial Road from Slap, moved to the Lower Black Hill Industrial Estate earlier this year.