An orderly break-up and sale of Irish entrepreneur Noel Smyth’s £120m UK property portfolio has the “best chance” of winning investor support, according to analysts at Chalkhill Securities.
The debt restructuring and disposal programme – to be completed by 2015 to recover around £140.4m – was one of three scenarios presented to investors in securitised debt secured against Alburn Real Estate’s portfolio.
Securitised debt analyst Janaka Nanayakkara, of Chalkhill Securities, said: “A restructuring solution based on this scenario [suggested by adviser CB Richard Ellis] appears to be Alburn’s best chance of securing agreement from bond holders.”
Smyth is battling to maintain the assets and is bidding to persuade investors in the £184m of securitised debt secured against the portfolio to give him a three-year loan extension.
In a note issued to bondholders, Smyth said that the best way to recoup the value of the 47 UK assets was to restructure the debt and let Alburn continue to manage the portfolio.
The company said that if it received a fee of £500,000 to manage the assets it could raise the value to £160m by 2016.
The outcome of the third option – administration and immediate liquidation of the portfolio and a sale in the next six months – was expected to recoup only £120m and result in the largest loss to investors.
Alburn has been trying to restructure the debt for almost two years, curing loan-to-value covenant breaches and attempting to buy the debt at a discount.
