Sailing charity the Jubilee Sailing Trust (JST) has announced that one of its subsidiaries has gone into administration after operating for nearly four decades.
JST Ltd, a subsidiary and registered charity in its own right, was “forced” into administration on 26 August after one of its principal creditors “threatened imminent legal proceedings to reclaim their owed credit”.
The insolvent charity owns STS Lord Nelson, a tall ship that was decommissioned in 2019 but which the organisation has not yet been able to sell.
JST’s other subsidiary, JST (Tenacious) Ltd, owns a vessel that remains operational called Tenacious.
The parent charity previously said that its finances had been in an “extremely precarious” state for some time, which were then exacerbated by rising costs and the Covid-19 pandemic.
Since 2018, total income for JST Ltd has dropped by 88%, to £255,045, according to accounts filed with Companies House.
‘Extremely precarious’ financial position
In a statement on its website, JST said that its financial position has been “extremely precarious for some time”. In 2019, another emergency appeal to save the charity was launched, which raised over £1m in four weeks.
In April this year, the charity warned that it could be forced into administration if it failed to raise £500,000 as part of its “make-or-break” fundraising appeal.
The appeal has raised £890,897 since then, which has enabled the charity to continue to operate Tenacious and deliver its mission and “make some progress with funds owed to our trade creditors”.
However, it added: “Unfortunately, despite the fantastic support received over the past few months, we have been forced to make the difficult decision to enter JST Ltd into administration. This decision was made after one of our principal creditors threatened imminent legal proceedings to reclaim their owed credit. Regardless of our recent organisational restructure and ongoing development review, this situation escalated rapidly and the sale of Lord Nelson will not be possible within this new timeframe.
“Since the launch of our campaign, every effort has been made to avoid this situation, including contacting all creditors to consider alternative repayment timeframes, or if they would be willing to forgive the funds owed to improve our balance sheet. We are grateful to those who were able and willing to assist us in this manner, however the debt forgiveness and the fundraising efforts combined were not enough to significantly change our position.”
As of 31 March 2021, the total value of JST Ltd’s net assets had decreased by £925,000. JST explained that the sale of Lord Nelson would have been used to repay its debts but that it could no longer do so within the “expedited time frame”.
It said: “With JST Ltd now in administration, the assets owned by this company will be sold to generate funds for creditor repayment. Lord Nelson will be taken over by the administrators for this purpose.”
Impact on employees
A spokesperson for JST told Civil Society News that there will be three redundancies while essential shore-based staff were being transferred to JST (Tenacious) Ltd under the Transfer of Undertakings (Protection of Employment) regulations.
Contracts of the permanent crew, who is employed via an agency, will be continued with JST (Tenacious) Ltd, the charity said.
“These transfers will ensure that Tenacious, her published voyage programme, and those who are booked to sail with her will not be affected by these changes.”
Meanwhile, JST’s last chief executive Patrick Fleming resigned last month after three years in the role.
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