FINANCE: The troubled Invesco Property Income Trust has suspended its shares after negotiations with lender RBS over the repayment of its £148m debt pile.
The fund’s directors have also agreed to accelerate the £114m fund’s disposal programme and wind up the fund under a new deal with its lender.
As previously disclosed, the directors do not expect to have realised the fund’s UK and European property assets in time to meet the loan repayment date of 28 September 2014, or meet in full the amounts due.
RBS has agreed to grant Invesco a three-month extension to the loan and that, in consequence, Invesco “must seek purchasers immediately for all the group’s remaining assets”.
The fund’s board and investment managers will work with the lending bank and its advisers to market the remaining property assets.
Invesco Asset Management said it is not expected that RBS will be repaid in full from the proceeds of the asset sale, or that any amounts due to Invesco under its loan facility will be paid.
The lending bank has agreed that provision can be made for the group to meet its liabilities to existing trade and other creditors and any further liabilities and obligations incurred during the remaining disposal programme and in the winding up of the company and its subsidiaries.
However, it was said to be “virtually certain” that there will be no return for shareholders on completion of the company’s winding up, leading to the suspension of shares last night.
The talks with RBS have delayed finalisation of the company’s annual financial report for the year ended 31 March 2014, which will be published in due course after board approval.
The latest valuation of the fund for the quarter ended 20 June reported a UK valuation of £42.7m and a European portfolio of €89.8m.
At that time, the sterling value of its bank borrowings was £148m, reflecting a loan-to-value ratio of 129.1% – breaching its maximum permitted LTV ratio of 100%.
The interest cover stood at 205.2% above the minimum permitted.
bridget.o’connell@estatesgazette.com
