Struggling listed investor Warner Estate Holdings has entered talks with Blackstone Real Estate Debt Advisers to determine its future financial position.
As at 30 November 2011, Warner had £224m of debt outstanding with Royal Bank of Scotland, Barclays and Lloyds. Two of the facilities were extended to 31 December 2012 and covenants were relaxed.
With regard to RBS, Warner has now entered negotiations with Blackstone, which is managing the loan for an RBS affiliate, in which a Blackstone debt fund holds a minority interest.
Warner said today in its interim statement: “There remains no certainty as to the terms of any agreement with the group’s lenders or whether it will be possible to reach an agreement.”
“The board continues to believe that any position reached with the lenders will deliver little or no value to existing shareholders, other than the opportunity to participate in an equity raise were that solution to be feasible and pursued.”
Recent disposals include 30/36 Market Place, Romford, 12/15 Above Bar, Southampton and Goldvale House, Woking for £4.7m (September 2011 book value £6.3m).
The proceeds from the first two disposals were used to settle the break costs on two swaps relating to debt of £25m, one at 4.5% to March 2015 and the other at 2% to December 2012. The net effect on NAV was a reduction of £1.4m.
The firm claims it continues to perform well at an operational level, but added: “The outcome of the discussions with the group’s lenders will determine its future.”
joanna.bourke@estatesgazette.com
