Shares in Wichford, the listed company that buys government-occupied property, plunged by 27% after it said it was cutting its full-year dividend by around 25% after revealing the collapse of Lehman Brothers will cost it £1.8m.

The company said this morning Lehman provided it with £344m of loans, which were transferred to three Windermere securitisation vehicles established by Lehman. Wichford said the collapse of Lehman may have implications for ‘the interest rate setting mechanism and the interest rate hedges’ that have been put in place.

It intends to make a provision for the hedges, which were valued at £1.8m at 31 March.

It said it was working with its advisers ‘to clarity the status of the relevant financial instruments between Windermere and Lehmam and confirm whether any further implications exist for Wichford’.

In light of the uncertainty and of prevailing economic conditions, Wichford is cutting its dividend for the year to 30 September from 10.2p last year to between 7p and 8p.

Wichford’s shares plunged 27% to 45.5p in response to the news.