Bankers offer deal to chief at Speyhawk
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Your support makes all the difference.THE founder and chairman of Speyhawk, the troubled property company, is likely to share in a pay bonanza if he turns the group around in the next three years.
The deal, which Trevor Osborne says has been approved in principle with Speyhawk's bank creditors, is almost certain to upset investors, whose shares have tumbled in value from nearly 400p in 1988 to just 15p.
Mr Osborne, a surveyor who started Speyhawk in 1973, would give no details of the proposed plan beyond commenting that 'the days when property executives were paid silly money have long since gone'. But it seems likely that Mr Osborne and his senior managers will be rewarded in 1995, depending on the asset sales and debt reduction they achieve.
Barclays, owed pounds 50m and the lead bank in the current reconstruction talks, admits that the remuneration will contain some element of performance-related pay. But it claimed that any incentive scheme would be much less significant than the recent equity-related deal struck with the managers of Imry, where Barclays wrote off pounds 240m last month.
Mr Osborne has suffered more than most in Speyhawk's descent to near collapse. He controls around 5.5 million shares, which are now valued on the stock market at pounds 825,000, compared with more than pounds 20m five years ago. However, shareholders are likely to point out that he has been well rewarded, earning nearly pounds 700,000 in the three years to September 1991.
The Speyhawk refinancing has been under discussion for 18 months and is approaching final agreement among more than 40 banks, owed pounds 300m. Under the proposed recapitalisation, the banks will convert pounds 100m of loans into subordinated debt. In exchange for writing off any loans, they will be able to convert into equity should the property market recover.
Speyhawk's net worth fell to minus pounds 70m in March, when it announced losses of pounds 217m after property write-offs. Its negative equity is likely to worsen to pounds 100m, when it reveals results for the year to September 1992.
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