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12 Aug 2010 12:25
12 August 2010
Speymill Deutsche Immobilien Company plc
("SDIC" or "the Company")
Further Banking Update
Following the trading update notified to the market on 30 July 2010, Speymill Deutsche Immobilien Company plc (AIM: SDIC), the pan-German residential property investment company listed on AIM, has revised the covenant calculations in relation to its results for the year ended 30 June 2010.
On 4 June 2010, the Company announced that it was likely to remain in breach of the Debt Service Cover Ratio ("DSCR") covenant on the one loan facility and it was anticipated that the Interest Cover Ratio ("ICR") covenant on two other facilities was likely to be breached at 30 June 2010. Had the bad debt provision announced at the end of July 2010 not been required, actual trading for the year to 30 June 2010 would have resulted in no breaches of the ICR covenant. However, as a result of this further provision, three of four facilities are now in breach of their respective ICR covenants. For the avoidance of doubt, the bad debt provision does not impact the cash position of the Company although any future recovery of such debts would improve cash flows.
The Company has also received a draft valuation report on its property portfolio which shows a decrease in value across the portfolio of approximately 3%, reflecting, as indicated previously, the relative stability of the portfolio in the current economic environment. The Directors do not expect a material change to the draft valuation numbers and the change in fair value of the property, amounting to approximately €44 million, will be reflected in the Company's Statement of Comprehensive Income but will have no impact on cash flows.
As a result of the revised property valuation, however, the Loan to Value ratio on the Company's one securitised loan package of €188 million has increased to a level at which the lenders could require the payment of amortisation in relation to that package.
As previously announced, the Company remains in discussions with its lenders regarding the restructuring of its debt facilities.
For more information, please visit http://www.speymilldeutsche.com or contact:
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SMP Partners Limited |
+44 1624 682 216 |
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(Administrator) |
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Vincent Campbell |
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Smith & Williamson Corporate Finance Limited |
+44 20 7131 4000 |
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(Nominated Adviser) |
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Azhic Basirov |
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Siobhan Sergeant |
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Fairfax I.S. PLC |
+44 20 7598 5368 |
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(Brokers) |
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James King |
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Gillian McCarthy |
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Tavistock Communications Limited |
+44 20 7920 3150 |
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(Media & Investor Relations) |
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Jeremy Carey |
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Simon Hudson |
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Notes to Editors:
Speymill Deutsche Immobilien Company plc is a pan-German residential property investment company, which listed on the AIM market of the London Stock Exchange in March 2006, raising £170 million. In May 2007, SDIC raised a further €250 million through a C share placing. The Euro denominated fund aims to provide investors with an attractive level of income together with the prospect for long-term capital growth.
The German residential market is viewed as attractive to investors due to a number of factors including rising German economic activity and productivity, and the availability of assets at below replacement cost. Acquired properties should, through active management, also have the potential for increased rental rates and accordingly improved capital values and increased yield.
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