Warner Estate warned shareholders today that it is in crunch talks with lenders to refinance £250m of debt which matures next year, but that even if these talks were successful it would provide little value for shareholders.
The listed property company and fund manager said that its debt maturity had been extended from April of next year to December, but that even if a successful long-term restructuring were achieved, it would bring little benefit to shareholders.
“Discussions with the lenders remain ongoing and there can be no certainty as to the terms of any agreement, whether any agreement will be reached or the viability of any equity raise or other potential solution,” Warner said. “The board believes that in the absence of a very significant rise in the value of the group’s properties in the near term, it is likely that any solution would deliver very little, if any value to existing shareholders, other than the opportunity to participate in an equity raise were that solution to be pursued.”
Warner chairman Philip Warner added: “The group has performed well at an operational level but it is the outcome of discussions with our lenders that will determine our future.”
The details of the talks were revealed in Warner’s results for the year to 31 March. The company saw its nebt liability per share rise from 7p to 20p, because its wholly owned property portfolio is worth £211m against debt of £250m.