London developer Quintain (QED) is in talks to sell its regional property portfolio for £40m. This would be a relief for shareholders, as the portfolio, called SeQuel, has been a serial underperformer in recent years. It lost 16.6 per cent of its value over the 12 months to 31 March, adding £11m to the valuation deficit - more than twice the profit it contributed from rents.
But the deal is far from sealed. The buyer would be a tiny Aim-traded shell company called Palace Capital (PCA). The company had net assets of just £121,655 at the year-end, consisting mainly of a £2m shop portfolio in Cheshire and £1.8m of debt. It wants to raise £23.5m of new equity to support the transaction, which may prove a tall order as the company's current share register is dominated by individual investors. Palace Capital does have approval for a £20m loan if it can raise the equity, however.
