The board of Home Reit has decided to pursue a managed wind-down of the trust.
The decision, which is subject to shareholder approval, comes after Home Reit was unable to re-finance its £114.6m remaining debt. Home Reit’s investment manager AEW UK had announced it would instead look to pay down borrowings through the sale of properties within its portfolio.
In a stock exchange announcement this morning (16 July), the board said that the expected size of the trust following the repayment of its debt may be too small for investors when considering its future as a listed Reit.
Michael O’Donnell, non-executive chair of Home Reit, said: “It is clear that Home Reit continues to face extensive challenges, including in respect of its debt position and pursuing and defending litigation action, and responding to an FCA investigation.
“Against this backdrop and the expected reduced size of the company’s portfolio, following an extensive review the board has concluded that the best course of action for shareholders is to propose a managed wind-down strategy.
“I would like to thank shareholders for their ongoing patience and support through the stabilisation process as we strive to address, and seek redress for, the issues facing the company.”
The board added that shareholders should be aware that the trust’s ability to make distributions to shareholders will be constrained while it faces potential group litigation and an FCA investigation.
“At present, the board is unable to assess properly its ability to make distributions under the applicable legal requirements. In addition, the company expects to retain capital to meet corporate costs and allow it to pursue legal action against those it considers responsible for wrongdoing.”
Home Reit was one of the largest investment trust initial public offerings of 2020, raising £240m.
However, uncertainty over the trust’s future intensified in 2023 following a series of issues over the 18 months, including the collapse of its rent roll, delayed annual results leading to de-listing from FTSE indexes, and accusations from shareholders over a lack of adherence to its investment policy.
