Following Schroder Real Estate Investment Trust Limited's previously announced disposal of its investment in Plantation Place on May 2, 2012, the company announces that it has now repaid a further £12 million of debt, reducing its securitized loan from £163.5 million (approx. 208 million) to £151.5 million.
The repayment reduces the company's annual loan interest cost by a further £0.7 million from £9.4 million to £8.7 million and follows the previously announced debt repayment of £10 million in April 2012.
As a condition of the loan repayment, on July 18 the company will break a pro-rata proportion of its interest rate swaps, crystallizing a break cost of £1.9 million and reducing the total negative mark-to-market value of the company's interest rate swaps to -£24.5 million.
The debt has been repaid from cash held inside the security pool charged to the Group's lenders, with the swap break costs to be funded from cash outside the security pool. This reduces total cash held by the Group to £25.4 million, of which £17.9 million remains outside the security pool. Based upon the last published independent property valuation as at March 31, 2012, the company's net loan-to-value following the debt repayment is 38%.
Further details of the company's strategy will be provided within the company's annual report and accounts to be released to the market on July 17, 2012.
Commenting, Andrew Sykes, Chairman of SREIT said: "The Board and Investment Manager continue to believe that, whilst other investment opportunities are being sought and appraised, currently, greater shareholder value can be derived from repaying debt compared with making new acquisitions."
Source: FTI Consulting