Bondholders are attempting to carry out a debt-for-equity swap to take ownership of the 550,000 sq ft
Investors that bought bonds secured against the income from the EC3 office are working on plans that would allow them to take an equity stake in the building and restructure the £435m of debt secured against it.
The building was bought by a unit trust made up of a fund managed by Invista Real Estate Investment Management, Tishman International, Stobart Group and a private investor for £525m in March 2006.
It is understood that bondholders, the largest of which is Fidelity International, would look to exercise security over the units in the trust that owns the building, rather than the building itself. The units would then be distributed between bondholders.
Structuring the takeover of Plantation Place in this way would enable bondholders to choose whether to sell the building or hold it until values recover, and to take any upside on the value themselves.
However, sources said that bondholders could face legal challenges, as the original loan documents are not clear on what actions bondholders can undertake. And not all of the bondholders are understood to support the proposals.
Duncan Owen, chief executive of Invista, said: “We have received no proposal yet, but we are interested in engaging in constructive discussions with bondholders.”
The loan secured against
Last December, the building was valued at £385m and, in March, CB Richard Ellis warned that a sale would fetch just £330m for bondholders.
Several proposals for the future of
