Foxtons breaches its banking covenants.

Grovelawn Financial News 17/02/2009

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Estate agent's problems grow

he London estate agents Foxtons have breached its lending terms and its backers have ruled out the chances of a bail out.

Many Londoners found their super sales persons approach to estate agency selling a little hard to bear, they were often criticised for their aggressive techniques and habit of taking all the parking spaces reserved for residents. The liveried mini cars made their agents’ drive to their next property sell a very public statement of their dominance in the property market. Now it would appear that their reign as a top performing estate agency has come to an end. Along with every other estate agency in the UK Foxtons has been struggling to maintain a reasonable grasp of the market and has breached its banking covenants.

The company was sold in 2007 by Jon Hunt to BC Partners for £360 million; its current owners now admit that they may have paid far too much. BC Partners say they will not inject any more money into Foxtons unless its lenders the Bank of America and Mizuho, a Japanese bank, agree to write off some of its £260 million debt. Foxtons will be managed by BC Partners, one of the partners said “in hindsight, we made the wrong assessment of the market.

Within the terms of the sale by Jon Hunt to BC Partners, Hunt lent his buyers £50 million to buy the company from him, this will not need to be repaid as the rosy economic forecast he predicted has not materialised. The US arm of Foxtons went into Chapter 11 bankruptcy last year with the loss of hundreds of jobs.

← Seven directors leave RBS | News For February 2009 | RBS included in Asset Protection Sheme →

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