Redefine International, the diversified income focused property company, continues to see significant progress in restructuring its debt facilities. A knock on effect has been the lifting of distributable earnings by 6.6%. In 2013 Redefine will be using its healthy status to acquire distressed properties in the United Kingdom with banks under pressure to dispose of them to reduce their leverage.
The firm has reported that £250million of legacy facilities have been repaid or successfully restructured. This after the reverse acquisition of Whichford, a property investment company based in the UK, which exposed the company to the high level of short-term debt.
The Near term debt maturity profile has been de-risked. There have been advanced negotiations to renew £70.7m of debt maturing in FY2013, the balance of which is to be refinanced or repaid. The Company used £7.8 million to repay the Coronation Facility last year. The £20.0 million facility remains available and is currently undrawn. The extension and restructuring of the £114.6 million Delta facility was also completed last year.
The UK central government, a stable occupier, occupies six of the seven income producing assets which were recently released from security for a £33.5 million repayment. One of the assets is the prestigious Lyon House development site in Harrow, North West of London. Excluding Lyon House the net initial yield from the above assets is pinned at 7.6% with a weighted average unexpired lease term in excess of 17 years.
Subject to meeting limited annual disposal targets the remaining £81.1 million Delta facility balance was extended to April 2015. The disposal proceeds, together with amortisation requirements, will be applied to reducing the facility balance.
Current Debt Repayment and Investment
- Equity: £8.6m
- £17.15m Crewe facility cancelled in return for £11.0m cash payment (part funded by Coronation facility)
- Reduction in interest of £1.0m p.a.
Future Debt Repayment
- Equity: £8.9m
- Assumed c£70.0m of near term facilities are refinanced at c60% LTV
- Approximate annualised reduction in interest charges of £0.5m p.a.
The company which is the JSE listed holding company of Redefine International PLC has reported, in terms of the South African business, distributing 4.38 pence per share. It had also raised around £127m in London, supported by RIN that contributed about £75m.
After restructuring the amount of debt on the balance sheet in relation to the value of the property assets is now below 60% on a pro forma basis.
Income returns accruing from future acquisitions and investments will flow to underlying shareholders in South Africa invested in RIN which has a 65.7% shareholding in Redefine International.