Barclays faces Speyhawk debt refinancing

BARCLAYS Bank is facing another embarrassing property company refinancing, this time at Trevor Osborne's Speyhawk, only a month after revealing heavy write-downs at Imry.

However, unlike with Imry, Barclays is not the sole lender - Citibank is also a leading lender and Speyhawk has 44 other banks.

Speyhawk's total bank debt is pounds 300m, of which pounds 50m is owed to Barclays, and the refinancing is to be announced 'over the next few weeks', according to banking sources.

Mr Osborne, Speyhawk's chairman, is understood to have clinched the main points of the deal on Christmas Eve, after 18 months of tortuous negotiations with several banking syndicates.

Under the terms of the deal, not yet completed, roughly pounds 100m of the the bank debt will be converted to subordinated debt, which is ranked below secured debt in terms of interest or capital repayment. In effect, if property values rise within a certain timespan then the subordinated debt becomes more likely to be repaid.

The level of subordinated debt is pounds 25m higher than expected.

Barclays was unwilling to comment yesterday on the Speyhawk talks because they are not yet complete, but privately sources were keen to stress that this 'is not another Imry'.

One leading property analyst last night described Speyhawk as 'as bust as bust can be, with just a lot of banks haggling amongst themselves about the losses'.

Speyhawk had a negative net worth of pounds 70m last April, when it announced losses of pounds 216m, and analysts expect this negative equity to increase to pounds 100m when figures for the year to end-September 1992 are announced.

View from City Road, page 21