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Minerva in £750m refinancing deal

TIP UPDATE: Banks offer lifeline, but the shares are still down 68 per cent since we said sell
September 22, 2009

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.

IC TIP: Hold at 40p

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.

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