Property developer Minerva has been bailed out by its banks, who have agreed it can refinance, extend and restructure loans in excess of £750m, causing its shares to jump by 21 per cent.
Minerva, whose market capitalisation is just £63.6m, was hit particularly hard by the real estate slump as it has few income-producing assets, and large exposure to cash-hungry development sites. In , chief executive Salmaan Hasan warned there was "significant doubt" that Minerva could continue as a going concern. However, revised terms have been agreed for loans totalling £570m on its two City of London construction projects, The Walbrook and St Botolphs. Six other facilities totalling £188m have also been refinanced. Crucially, loan-to-value covenants have been deferred.
In exchange, Minerva has made a cash repayment of £14m, agreed to pay enhanced exit fees and pledged additional security for the loans. It has also incorporated "certain leasing targets" on its City developments.
Price: 126p
Date: 01 Sep 2008
