United Trust Bank’s Structured Finance team was approached earlier this year by an experienced broker acting on behalf of a developer seeking funding for the acquisition of a development site along with a facility to meet the VAT liability payable upon purchase. The site comprised a vacant office building, two smaller buildings and a large car park located in a suburban area of the South East and within commuter distance of central London.
At the point of enquiry, the team was informed that a change of use, under Permitted Development Rights, was underway for the large office building to be converted to over 100 residential apartments and the consent would be granted before drawdown.
The purchase completion date was agreed for the end of January 2018. However, UTB had been approached more than half way through that month due to a previous lender withdrawing from the transaction at short notice. A quick and efficient response was therefore of the utmost importance.
During the initial negotiations, and with a close eye on the speed required to secure the site, UTB suggested a structured facility with additional security in the form of completed residential units from a third party within the borrower’s group. The clients were happy to proceed on that basis and, given the timescales, UTB immediately appointed their professional team.
An offer of funding was approved by the end of January and, following receipt of valuations, legal due diligence, overseas legal opinions and a meeting with the beneficial owner, the developers were able to drawdown the facility on the 8th of February 2018 to complete the purchase.
The introducing broker commented:
“When I first approached UTB my clients had 12 business days in which to complete the purchase of a large Permitted Development (PD) scheme where actual PD ratification – which underpinned the entry value – did not come through until after exchange of contracts. It was a complex deal for many reasons and yet I had heads of terms from Gerard Morgan Jackson within a day and I was able to put UTB directly in touch with an independent panel valuer who had provided me some useful desktop input. The deal was completed after some spectacularly efficient work by Ajsela Cela and UTB’s lawyers, Brecher & Co. A first-class performance all round!”
|Amount||£7.3m – Acquisition Loan (inclusive of fees & interest)
£2.3m – VAT Loan (inclusive of fees & interest)
|Loan Type||Structured Finance|
|Project type||Acquisition facility pending a revision of the planning consent|
|Special Features||Very fast turnaround – 12 business days from receiving enquiry to completion
UK Corporate Structure owned by Foreign investor