- What Urban Exposure has received “a number of enquiries” over the potential sale of its loan book
- Why Pollen Street Capital’s Honeycomb Holdings vehicle withdrew from a deal last month
- What next “There can be no guarantee that any proposals would lead to a satisfactory deal, particularly given current market conditions”
Urban Exposure has received “a number of enquiries” regarding the purchase of its loan book after a deal with Pollen Street Capital collapsed earlier this month.
However, the listed residential development lender said that whilst it “intends to consider all credible proposals which may be forthcoming” that “there can be no guarantee that any proposals would lead to a satisfactory deal, particularly given current market conditions”.
Urban Exposure is now pursuing Pollen Street for damages regarding breach of contract after it withdrew from a £113.8m deal to buy its book having signed a sales and purchase agreement. A sale had been agitated by Robert Tchenguiz, who had built up a 12.6% stake in the company through his R20 vehicle, proposing the externalization of the management team and the conversion of Urban Exposure into an investment company.
It has undertaken “a thorough review of its existing and future loan pipeline” and will “focus efforts in the immediate future on its existing loan portfolio” as well as “communicating with borrowers on a weekly basis, and actively managing issues that may arise, providing support and advice as appropriate regarding any impact of the pandemic on individual construction sites”.
Its assessment concludes that “due to the company’s conservative loan-to-gross development value position the company believes that the loan portfolio remains robust in the face of the unprecedented market conditions. Furthermore, our funding facilities and joint ventures remain in place, and we are working closely with our funding partners to continue to assess and mitigate any risks that may arise in the future”.
Some debt funds and ventures have been suffering margin calls from their own lenders, meaning that they need to pay back cash and recoup funds.
Urban Exposure has been making measured to reduce costs amidst the pandemic including furloughing 13 staff and cancelling the hiring of three out of a total staff base of 30. No bonuses will be paid for the year to 2019 and its four top executives will see their pay reduced by 10% from 1 May for at least three months.
