Raising Finance: Refinancing a Property Portfolio

Problem identified

The business was a UK property company which needed to refinance its existing property portfolio which comprised a hotel, gym, car park, some office space plus a number of restaurants. The company’s target was to raise £45 million to enable the shareholders to recover their initial equity investment in the project.

Solution Proposed

A comprehensive and detailed business plan was prepared to include 5 year cashflow and profit forecasts. As the rental stream was comprised of a number of different components (fixed, stepped, turnover and discretionary) a range of possible outcomes were modelled to identify the optimum amount of debt the company could support and to ensure a sufficient amount of headroom existed in the plan to avoid breaching the financial covenants imposed by the lender. Once the plan was agreed by the company and presented to the lender we then negotiated the bank’s proposed term sheet to ensure all outline terms and conditions were stated in accordance with the company’s objectives.

Outcome

To ensure a successful conclusion to the refinancing process also required us to instruct and agree terms with both lawyers and valuers and to work in partnership with them to ensure that both the Facility Agreement and Valuation Report were prepared and agreed to optimise the client’s interests and objectives and ultimately secure the funding.