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O Twelve Estates Limited ('O Twelve' / the 'Company')

15 October 2009

O TWELVE ESTATES ANNOUNCES SUCCESSFUL RESTRUCTURE OF 

GROUP'S LOAN FACILITIES

The directors of O Twelve are pleased to announce the restructuring of the Group's loan facilities with Nationwide Building Society and the other lenders. The revised loan terms, which are substantially the same as those agreed in principle as reported in the Group's results announcement on 15 July 2009, are as follows:

• The term of the facility until December 2014 is unchanged;

• The facility will reduce to £140 million on 31 March 2011;

• The interest margin over Libor will increase from 0.65% per annum to 1.25% per annum;

• An arrangement fee of £850,000 has been paid on signing;

• A fee of £5,950,000 will be payable on final repayment of the facility; 

• LTV will not be tested until the Lenders receive the portfolio valuation as at 31 March 2011, at which time the LTV must not exceed 85%, reducing to 80% from 31 March 2012 and 75% from 31 March 2013;

• The minimum interest cover ratio will be 115%, provided that, if rent free periods were treated as rent passing the ratio would be at least 120% until 31 March 2011, increasing to 120% thereafter;

• Cash lock up will continue until the LTV is 70% or less. However, after deducting finance costs, direct property outgoings and property management fees, the Lenders will allow the Group to receive up to £400,000 per quarter to cover overheads, tax and other property expenses.

Following completion of the restructuring and payment of the arrangement fee, cash balances available to the Group are £1.5 million. 

Phillip Rhodes, Chairman of O Twelve, said:

"The completion of the loan restructuring demonstrates the confidence our lenders have in the strategy and future of the Company. In addition there are signs that the unprecedented falls in UK property valuations over the past two years have now bottomed out, enabling the Board to view the future with increasing confidence. 

"The Group's target area in the Thames Gateway was selected to take advantage of the urban regeneration and infrastructure projects taking place in this area and for which the 2012 Olympic Games are a major catalyst. Letting activity over the past six months has been very positive with ten new lettings totaling 164,000 sq ft completed, thus reducing the void rate from 12.5% of estimated rental value at 31 March 2009 to 10.5% today. If lettings which have been agreed and are currently in solicitors' hands are completed, the void rate would reduce further to 7%. This activity confirms the underlying resilience of the Group's target area." 

-ENDS-

For further information please contact:

Rugby Asset Management	+44 (0) 20 7016 0050
David Tye
Andrew Wilson
Financial Dynamics	+44 (0) 20 7831 3113
Dido Laurimore
Rachel Drysdale
Laurence Jones
Fairfax I.S. plc	+44 (0) 20 7598 5368
Simon Bennett
Jeremy Porter

 

 

Notes to Editors

O Twelve was formed to establish a substantial property investment portfolio in the Thames Gateway and the adjacent areas of east London, Essex, South Hertfordshire and North Kent.  

Rugby Asset Management Limited ("RAM"), a subsidiary of Rugby Estates plc, is Property Adviser to O Twelve.

Further information on O Twelve can be found at www.otwelveestates.com

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