11th Oct 2023 16:56
(Alliance News) - Caledonian Trust PLC on Wednesday said it had been unable to finalise an agreement for the sale of St Margaret's House, the company's largest property in Edinburgh.
In February, the Edinburgh-based property investment and development company said it had selected a preferred bidder and entered into an exclusivity agreement to enable them to undertake the necessary due diligence and agree formal terms for the purchase by the end of April 2023.
But, despite formal terms being agreed with prospective purchasers over the past number of months, no agreement has been reached for the sale of the property.
The company is now proposing to market the property in the spring of 2024, provided market conditions continue to improve.
Caledonian Trust said it has agreed with Leafrealm Ltd that the interest rate on the GBP4 million unsecured loan provided by Leafrealm will be reduced to 2% above base rate, from 3% currently, subject to being capped at a maximum rate of base rate plus margin of 5% per annum and "floored" at a minimum rate of 2%.
Leafrealm is a company controlled by Douglas Lowe, Caledonian Trust's chair, chief executive and major shareholder. As part of the agreement, Leafrealm would retain the right to seek to restore the margin of 3% over base subject to giving the company not less than three months' notice in writing.
The Leafrealm loan has been used by Caledonian to fund existing property developments, to provide working capital and to provide a source of funding for development at St Margaret's House and at Belford Road.
The remainder of the terms of the loan, which was originally put in place on June 30, 2016, remain unchanged.
Shares in Caledonian Trust fell 6.3% to 150 pence in London on Wednesday.
By Jeremy Cutler, Alliance News reporter
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