Parents group 'confident' of buying St Margaret's as backers appear

Published on Tuesday 15 June 2010 22:46

FOUR "white knight" investors are locked in talks to bankroll a takeover of a closure-threatened private school, The Scotsman can reveal.

• St Margaret's in Edinburgh has been running at a significant operating loss for several years. Picture: Phil Wilkinson

Parents battling to prevent St Margaret's, in Edinburgh, from closing within weeks are pressing ahead with plans to buy the 110-year-old institution after securing "significant" pledges of help in the past two days.

A consortium set up by ten sets of parents said the level of financial support offered, as well as the initial response of liquidators KPMG, had given them "confidence" to proceed with a buyout.

Detailed proposals to cut costs at the school, which has been making a significant annual loss for five years, are now expected to be thrashed out, while a fundraising campaign is stepped up.

Four separate prospective backers – described by sources as two private individuals and two "institutions" – have agreed to get involved with the consortium as it explores takeover options.

One of these is thought to include buying out the Newington-based school's nursery and running it as a separate entity from the primary and secondary schools.

The consortium would have to raise enough cash to pay off creditors including the banking giant RBS and the taxpayer, with KPMG putting the school's debts at 2 million at least.

All 140 staff, including 86 full-time teachers, will have to reapply for jobs there if St Margaret's is saved. Teaching staff are thought to have offered to take a pay cut.

Up to half of the 397 pupils are expected to leave the school for other privately run institutions in the capital even if St Margaret's is rescued. If the number of pupils drops below 200, a new financial model will have to be drawn up.

St Margaret's accepts boys up to junior level, with an all-girl senior school. Under the consortium's proposals, the school would continue as a not-for-profit charitable trust and maintain the tax incentives this provides. It would change the terms of the trust, however, to ensure that the board of governors is always made up of parents of pupils at the school.

One source told The Scotsman: "Serious money has been put on the table, but it all rests with a business plan stacking up and being accepted by the liquidators."

Val Devlin, spokeswoman for the St Margaret's Parents and Friends Association, said: "We have a number of parties who are now working with the consortium, after being approached by parents. None of them are parents themselves, but all have some kind of interest in St Margaret's."

A spokesman for the consortium said it was focusing efforts on raising capital through every possible channel, including benefactors, donations and loans. "It is in everyone's best interest to achieve a purchase as quickly as possible, and we intend to arrange a meeting with prospective capital providers this week. The absolute sum required will become apparent very quickly after meetings with our backers this week."

The Scotsman has revealed how parents were informed by e-mail last Thursday that the school had been placed into voluntary liquidation and would close on 29 June.

KPMG last week insisted the school's governors had been "left with no alternative" due to dwindling rolls and the economic downturn affecting the value of the school's estate.