Foxtons in Debt for Equity Talks

Tue, 14 Apr 2009

The private equity group which owns troubled London estate agent Foxtons is in talks with banks about a debt for equity swap to help ease the firm’s financial burdens. Having acquired Foxtons for £370 million from its founder Jon Hunt in 2007, BC Partners is now in talks with Bank of America and Japanese bank Mizuho over a refinancing deal.

With Foxtons struggling even to repay its £30 million of interest repayments each year, the banks have demanded that BC propels a further £50 million into the company. Conversely, BC Partners has called on the banks to write off some of the £260 million it borrowed to finance the deal.

The banks are believed to have agreed in principle to write off some of the money owed, but only in return for an equity state in the company. However, with no deal signed, and BC Partners showing no signs of urgency in pushing through a deal, rumours are surfacing that the private equity group may be in discussions with rival firms over a sale.

The problems have stemmed from the collapse of the housing market in London, after a 60 per cent decline in the sale of London flats and houses . That slump has seen Foxtons’ sales activity drop by 75 per cent.
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