|Faulty Finances Puts Foxtons’ Future in Doubt|
Investment Company “regretting” purchase of Chiswick based estate agency
Foxtons could become the next high profile credit crunch casualty after reports that the company has breached its banking covenants.
The chain of estate agents, whose headquarters are in Chiswick Business Park, was bought by private equity firm BC Partners in May 2007. With Foxtons in debt to the tune of £260million, BC Partners said they were now “regretting” the purchase calling it a “mistake with hindsight.”
The investment company announced that Foxtons had breached its loan covenants and they would not be putting in any more money into the property company unless the banks agreed to write off some of what’s owed.
Foxtons is still profitable as growth in its letting business has offset a slowdown in property sales, BC Partners claims. Lettings now account for about half of Foxtons’ revenue, compared with 20% previously so those looking forward to celebrating the end of green Mini Coopers on the streets of W4 should hold their horses for the time being.
“For us, it’s water under the bridge,” said a spokesman for BC Partners. “If we’re lucky enough to see a recovery in the London housing market, this business will come roaring back.”