Fog Cutter Capital Group Inc. Sells U.K. Real Estate Portfolio
PORTLAND, Ore.--(BUSINESS WIRE)--Nov. 26, 2001--Fog Cutter Capital Group Inc. (Nasdaq:FCCG), an opportunistic investment group specializing in mortgage and real estate related assets has sold a portfolio in the United Kingdom of 18 retail and office properties, located in the Midlands and Southeast of England, for a net price of (pound)14.0 million ($19.7 million).
In conjunction with the sale, secured indebtedness in the amount of (pound)10.8 million ($15.3 million) was retired.
The sale resulted in a gross gain of (pound)1.2 million ($1.7 million), which was partially offset by a loan prepayment penalty of (pound)0.5 million ($0.7 million), resulting in a net gain of (pound)0.7 million ($1.0 million). The net gain will also be partially offset by the recognition of unrealized currency exchange losses of $0.7 million resulting from the distribution of net proceeds from the Company's foreign subsidiary. Since these unrealized currency losses had previously been deducted from the equity capital of the Company, stockholders' equity will increase as a result of the sale by the full amount of the net gain.
The sold properties totaled 242,000 square feet and were originally acquired by the Company in 1998 and 2000 as part of the Company's REIT income property portfolio. Four other assets from this original portfolio had been sold in 2000 at a gain of $1.2 million. With the completion of this transaction, the Company has now disposed of all of its direct investment in U.K. income property, however, the Company continues to hold a significant investment in Europe through its 26% interest in Bourne End Properties PLC ("Bourne End").
Bourne End is a specialist investor in retail property, currently owning fifteen town shopping centers located in England and Scotland. The centers range in size from 80,000 square feet to 340,000 square feet. In 2000 the Company organized and led a group of investors to purchase all of the outstanding capital stock of Bourne End. The Company made its investment via its wholly owned subsidiary, BEP Islands Limited, along with partners Merrill Lynch (Jersey) Holdings Limited (a subsidiary of Merrill Lynch & Co., Inc.) and Greenbau Estuary Limited (an affiliate of Catalyst Capital LLP, formerly known as The Greenwich Group International). At the time of the acquisition, Bourne End had approximately (pound)169.6 million ($245.1 million) of assets and (pound)123.1 million ($177.9 million) of debt. The group's strategy is to reposition each of the centers, including new capital expenditures on existing space and new development on excess or adjoining land, with the ultimate goal of reselling many of the properties. |
