Saturday 24 February 2018

Tender for advisers to break Alburn impasse

Donal O'Donovan

ROTHSCHILD BANK has launched a tender process to find advisers to help break the impasse between property investor Noel Smyth and bondholders owed £184m (€218m) by his UK property empire Alburn Limited.

The process was announced on the Irish Stock Exchange.

Alburn's assets are mostly outside the core London market and have seen big falls since the UK economic downturn.

In December, Mr Smyth and property investor Highcross offered to buy back the company's debt at market rates.

His offer was accepted by most bondholders but Royal Bank of Scotland (RBS) used its 25pc share of one layer of the debt to block the offer.

That has led to a deadlock between owners and lenders about how to manage the portfolio. In February, Mr Smyth met with bondholders and proposed a restructuring of Alburn's debt, including extending the maturity on parts of the deal.

Mr Smyth told the Irish Independent that both sides agreed at the time that advisers would be appointed to help creditors consider the plan.

The complexity of the debt structure means a formal tender process is needed before adviser can be hired.

The Alburn bonds are held by a variety of funds and the debt structure is made up of a number of layers of seniority. It makes decision making inside the group and negotiations between the creditors and borrower unwieldy.

Rothschild, as "servicer" of the debt structure is looking to hire an investment bank and real estate adviser. It will advise bondholders on the Smyth plan but will ultimately also be able to act as a point of contact between the borrower and lenders.

Irish Independent

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