Property outsourcing specialist Telereal is close to agreeing a £340m refinancing of the Trillium business it purchased from Land Securities earlier this year, in a move that would allow it to achieve a huge early profit on the deal.
The refinancing would allow Telereal to withdraw around £150m of equity from the deal, which was completed in January this year, and which now looks like having been the trough of the market.
Undertaking the deal using mostly equity has proved prescient for Telereal, as the thawing in the debt markets and recovery in property prices has allowed it to put in place a more profitable capital structure.
Telereal, which is privately owned by the William Pears Group, was bought for £750m after Land Securities decided to sell the business rather than pursue a three-way demerger.
The deal saw LandSec keep £232m of cash that was within the Trillium business, and Telereal took on board a £49m loan already outstanding within the Trillium business.
Its cash consideration in the deal was £469m, and the new £340m loan will allow it to conservatively gear Trillium and withdraw around £150m of equity.
Eurohypo and Lloyds Banking Group are understood to be providing around £100m of new debt each, with Barclays and Santander providing the remainder.
Clients who have outsourced property to Trillium include the Department for Work and Pensions, insurance company Aviva and Royal Mail.
In a statement Telereal told EGi News: “Telereal Trillium is negotiating a £340m debt refinancing package which we hope to close in the next two weeks.
“Negotiations are ongoing with Barclays, Eurohypo, Lloyds and Santander, but have not yet reached completion.”
michael.phillips@estatesgazette.com
