Property investor O Twelve Estates has gone from net assets to net liabilities in the past six months.
The value of the property portfolio has fallen from £250m to £174m at the end of March 2009. Net debt is £162m. The company is in default of its loan to value ratio of 75%.
The facility is being renegotiated. It will still last until December 2014, but it will reduce to £140m at the end of March 2011. The loan to value must not exceed 85% but this percentage will reduce over the years to 75% at the end of March 2012. The loan to value has to fall to 70% before the cash lock up - rental income in excess of financing costs plus £400,000 a quarter is retained by the banks - is ended. The interest rate will increase.
There was a small cash inflow from operations in the year to March 2009. Annualised income is £13.8m.
At 4.5p a share, down 0.625p on the day, O Twelve is valued at £5.51m.
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