Serviced Office Group Aims to Reduce Interest Cost
The Serviced Office Group is seriously considering proposals which will help the group reduce the interests it is currently paying out. The group has recently completed the renegotiation of its banking facilities with Royal Bank of
Leaseback deals and sales are being thought of seriously as a mean to cut down the interest cost by the Serviced Office Group. At the time of the last valuation the office rental company had loans which amounted to £26m lasting up to 2012 end as opposed to assets worth £28m. This includes the Teddington property which is estimated to be worth around two million pounds.
Company officials have voted for an option agreement which will be applicable on purchase prices of £2.5m or more. A share which will be limited to 50% of any profits made in planning is part of this agreement. With these options Serviced Office Group will be able to pay back about £5m of its total loans in the year 2010 alone.
Leaseback deal and sales, if they happen, are expected to help improve the LTV of the company while dramatically reducing payable interest. However there are fears that these actions may also hamper the gains that may arise from planning opportunities. Speaking about these developments, Chairman Michael Kingshott said that the current year will be devoted to stabilising the company’s financial position and streamlining their activities.
