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Foxtons Estate agent going under
brit1234
Posts: 5,385 Forumite
Banks take over Foxtons in emergency debt move
Foxtons, the famously aggressive London estate agent known for its fleet of racing green Minis, has been taken over by its banks as part of an emergency refinancing.Bank of America and Mizuho struck a deal today to reduce the debt from about £300 million to £120 million in return for them becoming the majority shareholders.
Founder Jon Hunt sold the business at the top of the property market for £360 million in May 2007 to private equity firm BC Partners. As the property market crashed, the deal became a watchword in appallingly-timed deals.
BC has spent much of the last year trying to renegotiate the loans it took out to fund the takeover. Mr Hunt has also written off a loan that he made to the firm, ending his association with the firm he founded in 1981.
Foxtons' management, led by chief executive Michael Brown, will receive a minority stake of as much as 20 per cent depending on whether performance targets are hit. BC will inject less than £50 million of fresh equity in to retain its status as the biggest minority shareholder.
The firm's managing partner in London, Andrew Newington, said profits had started rising as the market picked up in recent months.
London house prices are rising at about four per cent on a year ago having gained strongly in the second half of last year.
Although this has been good for most agents in the capital, firms remain cautious amid concerns that last year's pick-up was fuelled by demand outstripping supply. Mortgages remain difficult to obtain for many potential buyers.
http://www.thisislondon.co.uk/standard-business/article-23792458-banks-take-over-foxtons-in-emergency-debt-deal.do
Foxtons, the famously aggressive London estate agent known for its fleet of racing green Minis, has been taken over by its banks as part of an emergency refinancing.Bank of America and Mizuho struck a deal today to reduce the debt from about £300 million to £120 million in return for them becoming the majority shareholders.
Founder Jon Hunt sold the business at the top of the property market for £360 million in May 2007 to private equity firm BC Partners. As the property market crashed, the deal became a watchword in appallingly-timed deals.
BC has spent much of the last year trying to renegotiate the loans it took out to fund the takeover. Mr Hunt has also written off a loan that he made to the firm, ending his association with the firm he founded in 1981.
Foxtons' management, led by chief executive Michael Brown, will receive a minority stake of as much as 20 per cent depending on whether performance targets are hit. BC will inject less than £50 million of fresh equity in to retain its status as the biggest minority shareholder.
The firm's managing partner in London, Andrew Newington, said profits had started rising as the market picked up in recent months.
London house prices are rising at about four per cent on a year ago having gained strongly in the second half of last year.
Although this has been good for most agents in the capital, firms remain cautious amid concerns that last year's pick-up was fuelled by demand outstripping supply. Mortgages remain difficult to obtain for many potential buyers.
http://www.thisislondon.co.uk/standard-business/article-23792458-banks-take-over-foxtons-in-emergency-debt-deal.do
:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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For all those outside London this company is famous for trying to more over value properties compaired with other London Estate agents:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
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They've been exposed by the BBC as liars and crooks. So hopefully we might see the back of them sometime soon.0
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Why do you have a ':D' face on the title of a post about a company potentially going under?0
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Founder Jon Hunt sold the business at the top of the property market for £360 million in May 2007 to private equity firm BC Partners. As the property market crashed, the deal became a watchword in appallingly-timed deals.
Hang on, I thought the property crash was just a bad dream and never happened?
:D Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable. J. K. Galbraith0 -
true but if you read the article they're not actually going under, it's only Brit making things up again and not understanding.Graham_Devon wrote: »Nothing. But looks to be a lot wrong for the company!
the private equity firm is taking a bigger ownership of the company by swapping shares for taking responsibility for the debt.
it's what private equity firms profit from - on the market those shares would have been much more expensive. they'll be selling the shares to an investor in the future for a large profit it's a good deal for them. here's a list of their deals in the past - those firms are still successful and profitable.
http://www.bcpartners.com/bcp/portfolio/sigtrans/0 -
OP: If you had debt of £300 million, wouldn't you want to maximise your income (and hence profit) ...?0
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true but if you read the article they're not actually going under, it's only Brit making things up again and not understanding.
It is true that Brit is exaggerating a lot, but do not pretend that a debt for equity swap is some sort of fantastic financial deal for either the creditors or Foxtons. It is called making the best of a bad deal.Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable. J. K. Galbraith0 -
What an amusing article.
Hubris gets its just rewards.
Although not quite, as the founder actually did rather well out of it all.
Still, enjoyable, salutary stuff.0
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