LONDON (Alliance News) - Invista European Real Estate SICAF said Monday its lenders have enforced their security rights on the company's debt after its standstill agreement expired on Friday, causing its shares to be suspended from trading in London.
Invista said that following the expiry of its standstill agreement with Islay Investment Sarl, an affiliate of Blackstone Real Estate Debt Strategies, expiring on Friday, Islay has called for repayment of the loans it is due. Invista has previously been continuously extending the repayment deadline for the loan facility and on Friday did so for the ninth time, though that extension only covered it until the end of that day.
As Invista has not been able to repay the loans it owes to Islay, the lender has called on the guarantee of loans by the company and, as Invista also cannot meet that guarantee, has enforced its security by way of selling Invista's stakes in Invista European Real Estate Holdings Sarl, Invista European Real Estate Finance Sarl and Invista European RE Pocking PropCo Sarl to Artillery Investments Sarl, TTNYR Limited, TTNYR Artillery LLP and DPK Artillery LLP.
The security will involve Invista selling all of its shares and debt interests in the subsidiaries to the buying consortium.
Invista has been in the process of attempting to sell its property portfolio but said all offers tabled thus far had been well below its net asset value. While its lender had supported its efforts to sell the portfolio, Invista said the decision had now been taken to enforce the lender's security in a way that leaves the company solvent but without any value to distribute to shareholders.
As a result, Invista said it intends to seek approval from its shareholders for a voluntary liquidation.
The company said its portfolio valuation was down by 3.8% in the quarter to the end of June to EUR226.2 million. It sold two properties in the quarter, in Germany and Spain, and sold the Pocking property in Germany for EUR13.0 million post the end of the quarter.
But its forecast rental income for 2016 had been hit hard by a tenant default and the unexpected exercise of lease breaks.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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