Thursday 22 March 2018

Receivers for Noel Smyth's £134m UK portfolio

John Mulligan and Donal O'Donovan

RECEIVERS are poised to be appointed to a string of nearly 50 properties worth £134m (€167m) in the UK that were controlled by developer and solicitor Noel Smyth.

Mr Smyth said yesterday that he had hoped to avoid the receivership, but will have a continuing role in the portfolio.

In a stock exchange announcement yesterday, Mr Smyth's Jersey-registered Alburn Real Estate company noted that it had failed to repay by last Monday "all the loans, together with accrued interest and all other amounts" that were owed under a 2007 credit agreement.

A borrower security trustee is now in the process of appointing two joint fixed-charge receivers from Savills Commercial to enforce the borrower security. They'll be appointed receivers over 40 properties in the UK.

The borrower trustee is also in the process of appointing administrators over seven properties in Scotland.

Two executives from Moorfields Corporate Recovery will handle the administration.

The portfolio includes 29 offices, including a property on London's Tottenham Court Road, 'Project House'.

There are also 13 industrial warehouses and a shopping centre, the Waterdale Centre in Doncaster, included in the assets. That shopping centre is valued at £10m, as is the Tottenham Court Road office.

The 47 properties had once been valued at £200m (€250m).

Alburn had issued roughly £350m (€437m) in loan notes to bondholders that were initially due to be repaid in 2016.

Steps to accelerate the loan had been completed on May 11, and a demand for repayment was issued.

Alburn had until last Monday to repay the borrowings.

In November last year, the Co-operative Bank sold £11.7m in notes it held in Alburn to a firm called Pearsanta, which is controlled by Irish investor Vincent Barrett.

Speaking to the Irish Independent, Mr Smyth said that he will remain as manager of the entire portfolio while the receivers seek to sell it. He will be paid a share of the £15m in rental income generated from the properties by way of a fee.

He expects that four or five of the properties could be sold before the summer.

Mr Smyth added that the first £14m of any sale proceeds will have to go towards paying off an existing hedging agreement, while the remainder will go straight to bondholders.

He said that he had teamed up with US investor group Lone Star -- headed by founder and Irish passport holder John Grayken, in an effort to buy out the Alburn bondholders. However, he said Lone Star wanted to offer bondholders 50pc of their money back, while lenders wanted between 60pc and 70pc.

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