Home REIT intends to sell more of its property portfolio after it failed to refinance its loan with Scottish Widows.
The company appointed AEW UK Investment Management and JLL Debt Advisory to conduct a “comprehensive process” in relation to its refinancing plans earlier this year.
However, the board of Home REIT said it had now concluded that it could not secure refinancing of the existing facility with Scottish Widows “on terms that it could recommend to shareholders, despite extensive and advanced discussions with a potential lender”.
As at 31 May 2024, the company said it had total borrowings of £131.8m, which will be further reduced by recent property sales totalling approximately £27m.
Scottish Widows has informed Home REIT its objective is for repayment of the loan balance in the short term, so the company will “therefore be implementing a strategy to repay the outstanding borrowings in a timely manner, focused on further property sales. The company anticipates ongoing support of Scottish Widows as it completes this repayment strategy”.
Michael O’Donnell, non-executive chairman of Home REIT, said: “Whilst the stabilisation strategy adopted in August 2023 has progressed from an operational perspective, re-financing of the debt was a key component of its continued advancement. As a re-financing has not been possible, the board is considering a number of options both to re-pay the outstanding debt and provide an optimised resolution for shareholders, which may include a more extensive realisation strategy.”
