Realis mulls discount debt buyback to fire up City Sentral

debt purchase would free up capital to advance development of mall.

David Hatcher reports published by Property Week

Realis Estates is in talks to buy back the debt secured against its City Sentral shopping centre project in Stoke on Trent in a bid to start development on the stalled scheme.

Oaktree Capital Management owns the £24m of debt secured against the scheme but could sell it back to Realis for as little as £65m a 73 discount The private equity house bought the debt last August as part of Project Harrogate the sale of a loan portfolio by Lloyds Banking Group with a face value of £625m that it purchased for around £250m.

It is thought that Oaktree valued the debt secured against City Sentral at around £5m Both parties are keen to strike a deal If Realis does buy the debt for £65m or restructure it, it would decrease its interest payments increase operational cashflow and free up around £175m more capital in the long term to pay retailer incentives, enable compulsory purchase orders and gain detailed planning.

It is understood that several construction companies have expressed interest in buying the debt to obtain a longer term agreement for the construction contract It is believed that around £15m of additional funding is needed to bring the site to a stage where development can commence

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