View the article online at http://citywire.co.uk/wealth-manager/article/a747855
Currency losses push the Gherkin into receivership
by James Phillipps on Apr 25, 2014 at 09:56
The City’s iconic Gherkin tower has been put into receivership following five years of defaults.
Deloitte was brought in by debtholders after ‘adverse interest rate and currency movements have caused senior liabilities secured by the property to increase materially’, the company said.
IVG Immobilien, which runs the fund that owns part of the Gherkin, went into bankruptcy last year. It partnered with private equity group Evans Randall to buy the building for £600 million in 2007. However, part of the loan to pay this was in Swiss francs, the value of which has since risen by over 60% against sterling. This resulted in covenants being breached as the loan to value increased.
Neville Kahn, joint receiver and restructuring partner at Deloitte, said: ‘The senior lenders were reluctant to appoint a receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for over five years, and concerns that the borrowers’ lack of equity in the transaction had caused their incentives to become misaligned with the lenders.
‘We are in the process of communicating with all tenants and working with the property manager to ensure the continuation of all property management services with no interruption to tenants.’
The buildings tenants include Standard Life, but it is not known what percentage of the building is currently let.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.
More about this:
On the road
on Aug 01, 2014 at 12:55