The Negotiator reports on a Foxtons refinancing deal that will see their debt reduced £300 million to £120 million.
Apparently, discussions over Christmas have seen the banks and the founder, Jon Hunt, who sold out for £370 million odd either reduce their stakes for equity or write it off completely. The founder apparently had the benefit of a shareholders loan for £50 million.
The banks originally lent £260 million, which like all great plans went up after Foxtons apparently rolled up interest payments into the debt.
But will this be enough? Foxtons MD says he can now face the future with confidence. Well, on the one hand it extremely handy to have your debt slashed by over 50%, but when you still owe at least £120 million and the bank owns the company and the board one has to ask whether the future is as bright as the MD hopes. Indeed, with the banks now running the show and appointing their own board will they keep it going, chop it up, sell it? Apaprently, there will be some cash available to spend, but with the bank’s board at the helm, will such cash be channelled where it is needed most?
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