Targetfollow at risk despite £150m lifeline
PUBLISHED: 06:25 23 October 2010
The future of a major development and 90 jobs remains unclear despite a £150m lifeline aimed at keeping struggling property firm Targetfollow afloat.
Last night a “high quality consortium” of investors pledged £150m to write off a portion of the Norwich-based company’s £700m debt to Lloyds Banking Group and enable it to continue trading.
But sources close to Lloyds said while talks were ongoing “no deal had been done”, and said a high court hearing aimed at placing Targetfollow into administration was still set for next week.
Targetfollow is behind the planned Harford Place development off Hall Road in the south of the city, which includes homes, commercial and retail space.
The company, based on Riverside Road, employs 200 nationally, including 90 in Norwich, which could be at risk if the company goes into administration.
Targetfollow, which owns a national portfolio of properties worth hundreds of millions of pounds, has been unable to repay two major loans with Lloyds, both of which matured earlier this year.
Targetfollow hoped the £150m would allow the company to “release further value” in its properties and avoid the need for emergency sales.
The company said the deal addressed Lloyds’ concerns by enabling restructuring of the business while paying debt “in an orderly manner”.
Ardeshir Naghshineh, chairman and founder of Targetfollow, said: “I believe that this consortium addresses the issues that the bank has raised with the company in the past 12 months, and will pave the way for the bank and the company to move on from what has been a very difficult time.”
The company said the investment was “subject to Lloyds’ approval” and due diligence over a four-week period.
No one from Lloyds Banking Group was available to comment, but a source close to the bank said: “We are a long way away from a deal being struck. No deal has been done and a deal can’t be done on the current position.
“A high court hearing over administration will still be going ahead as planned next week unless a deal can be reached before then.”
Targetfollow reported gross rental income of £36.5m in 2009, up from £29.9m the year earlier, with operating profit before exceptional administrative expenses nearly doubled to £14.6m.
The company reported bank debts at £733.3m last year with properties worth £955.4m - but a valuation by Lloyds put the value at less than half that amount.