Quintain Estates and Development has “removed a distraction for management and investors” after exchanging on the £39m sale of its Sequel portfolio to ?AIM-listed company Palace Capital.
Analysts welcomed the disposal of the regeneration specialist’s last regional assets, which will allow it to focus on its Greenwich and Wembley projects and reduce company debt.
The sale price for the 24-strong portfolio was a 7.2% discount to the asset’s £42.4m book value as at March 2013 – less than the £4m discount that had been expected – and reflected a 13.2% yield.
Quintain, led by chief executive Max James (pictured), will net proceeds of £38.5m from the sale after subscribing to £550,000 of Palace Capital shares that were issued as part of a £23.5m placing to complete the purchase.
These proceeds will be used to pay down Quintain’s £440m debt, and will take the group’s loan to value from 46% at the end of March 2013 to 43%.
For Palace Capital, the company led by former Mission Capital boss Neil Sinclair and backed by entrepreneur Stanley Davis, the deal is seen as a “reverse takeover” boosting its £2m portfolio.
The asset-management heavy portfolio has a circa £5.2m rent roll and an average lease length of less than 3.5 years.
bridget.oconnell@estatesgazette.com
