| CATEGORY: NEWS AND ANNOUNCEMENTS |
Oaktree taking Countrywide stake |
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Tue 17 Feb 2009
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LONDON (SHARECAST) - US distressed debt fund Oaktree Capital is close to snapping up a stake in UK estate agent Countrywide, suggesting the bottom of the property market may be near.
It is thought the American business will buy a 35% stake from US private equity firm Apollo Advisors, which paid £1bn for it at the peak of the market in 2007.
The deal will slash Countrywide’s debt to about £175m from £750m and provide £75m of fresh cash to help it through the recession. Apollo, run by private equity investor Leon Black, will be left with a 30% interest.
Three quarters of Countrywide’s bondholders have to approve the deal, to be implemented via a scheme of arrangement, if it is to go through.
“Countrywide has been adversely affected by the unprecedented combination of falling house transaction volumes and the severe curtailment of mortgage lending,” read a statement Tuesday.
Despite implementing significant cost savings, it has concluded that the current capital structure and the level of debt, “is no longer sustainable, and that a significant recapitalization of the company's balance sheet is necessary to enable Countrywide to fulfill its potential”.
Countrywide, the UK’s largest chain of estate agents, has already axed more than 1,500 jobs during the property market slump.
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