A £220m refinancing of British Car Auctions’ portfolio has been unseated by a sale to a pair of M&G funds.
M&G’s £1.6bn Secured Property Income Fund and an internal client fund will each take 50% stakes in the 18-strong portfolio, which is being sold for £240m by funds advised by Montagu Private Equity.
Montagu had been close to agreeing a refinancing of the portfolio with a collection of banks including Lloyds and HSBC, which were offering senior debt, and Macquarie and Partners Group, which were offering mezzanine.
However, the refi was dropped at the start of this month as the potential of a sale emerged.
The debt securing the portfolio was part of Royal Bank of Scotland and Blackstone’s Project Isobel.
Two other parties that at different times considered refinancing the portfolio include RBS’s and LaSalle Investment Management’s special situations fund, which were understood to have been in discussions as recently as six months ago.
The sale to M&G’s funds effectively ends years of uncertainty surrounding the portfolio, which Montagu originally attempted to sell in 2007.
It later withdrew the portfolio from sale as the early effects of the credit crunch began to deter buyers.
All the sites are leased to British Car Auctions, which is the UK’s largest vehicle remarketing group, on full repairing and insuring basis with contracted annual rental uplifts for a further 18 years.
CBRE advised M&G Real Estate; Dean Street Advisers and Bell Capital Partners advised Montagu Private Equity.
Bridget.O’Connell@estatesgazette.com
