De Vere instructs Lazards to sell £300m venue division to repay Lloyds debt

De Vere Group has instructed Lazards to sell its 30-strong nationwide venue and conference division for between £280m and £300m, with all the proceeds to be used to pay down Britain’s largest operator of conference and training centres’ £1.1bn debt with Lloyds Banking Group.

De Vere Venues logosIn a statement to the Stock Exchange this morning, De Vere Group confirmed the Lazard mandate to conduct a sale process for De Vere Venues “which comes after a number of unsolicited approaches from interested parties”.

While no price guidance was explicit, De Vere’s 30 venues, which include 3,000 bedrooms, have been recently re-valued by DTZ at more than £280m.

De Vere Venues – with nationwide conference centres including in Surrey, Denham, Greenwich, London, Oxford, Reading, Cheshire and High Wycombe – is expected to deliver £28m in EBITDA this year with a predominantly corporate customer base, with circa 80% of revenues B2B, of which 84% is from repeat business.

In the last seven years, De Vere Venues business has seen £112m invested, and has created bespoke training facilities for companies including BMW, Allianz, KPMG, British American Tobacco and PwC.

All proceeds for the sale will pay down De Vere Group’s £1.1bn outstanding debt with Lloyds, down from £1.8bn, after the bank completed a comprehensive restructuring and debt-for-equity-swap in March and September 2012.

Lloyds first restructured De Vere Group’s debt in March 2012, reducing the three tranche debt and extending all maturities to June 2015, with a six-month extension option to the end of December:

  • a £600m senior facility, for which the margin has been reduced to 3% to 2.3% per annum;
  • a £335m senior facility, for which the margin has been reduced to 4% to 3% per annum;
  • a £176m senior facility, for which the margin has been reduced to 4% to 3% per annum;

In addition, Lloyds has extended a £30m revolving credit facility, a £5m overdraft facility and a £35m capital expenditure facility.

Following the restructuring, last September Lloyds took ownership of all of £760m worth of De Vere Limited preferred ordinary shares in issue, through Uberior Equity Limited, a wholly-owned subsidiary of Uberior Investments, which is the former HBOS private equity arm.

As a result, Lloyds now effectively controls De Vere Group.

In a statement to the Stock Exchange this morning, De Vere Group added: “The group is not under any pressure to undertake a disposal and will only conclude a transaction which is in the best interests of all stakeholders.”

Next, De Vere Group is to sell its last non-core property in its portfolio, the Grand Brighton, home to IPD’s UK Property Investment Conference for more than 20 years. It will come to market next year, following the completion in the spring of 2013 of a substantial investment programme.

De Vere Group is streamlining its remaining hotel business to a cohesive golf resort division.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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