Friday, July 18, 2008
Pendragon hit by multi-million pound loan demand
Pendragon’s £375m property joint venture has breached its banking covenants, leading to demands on the dealer group for a multi-million-pound cash injection.
The group and its joint venture partner - property fund manager aAIM,, have been asked to put £20m into the scheme that owns 115 of Pendragon’s assets, including dealerships, vehicle-repair depots and the head office in Nottingham.
The joint venture has breached tight loan-to-value covenants on £330m of debt, which was supplied by the Royal Bank of Scotland.
This means Pendragon has borrowed the money for longer than the bank will allow.
“Pendragon didn’t pay anything into the venture in cash, but it contributed a share of its leases,” said Toby Proctor, an analyst with independent consultancy Trend Tracker.
“It may be that the property value has sunk too far for it to pay back what it borrowed.
“I’m sure it did that in order to raise some cash but now there’s nothing backing up their borrowing.”
This most recent development is further bad news for the group, which recently announced it will be cutting 500 jobs.
DATED: 18.07.08
FEED: MT
The group and its joint venture partner - property fund manager aAIM,, have been asked to put £20m into the scheme that owns 115 of Pendragon’s assets, including dealerships, vehicle-repair depots and the head office in Nottingham.
The joint venture has breached tight loan-to-value covenants on £330m of debt, which was supplied by the Royal Bank of Scotland.
This means Pendragon has borrowed the money for longer than the bank will allow.
“Pendragon didn’t pay anything into the venture in cash, but it contributed a share of its leases,” said Toby Proctor, an analyst with independent consultancy Trend Tracker.
“It may be that the property value has sunk too far for it to pay back what it borrowed.
“I’m sure it did that in order to raise some cash but now there’s nothing backing up their borrowing.”
This most recent development is further bad news for the group, which recently announced it will be cutting 500 jobs.
DATED: 18.07.08
FEED: MT
