Summit News

Foxtons trading profitably, BC Partners says

LONDON (Reuters) - Heavily indebted UK real estate agent Foxtons is trading profitably, even though sales volumes have fallen around 75 percent from the market peak, its private equity owner BC Partners said on Tuesday.

“Foxtons is trading very profitably, but not in line with initial expectations,” said BC Partners’ managing partner Andrew Newington, speaking at the Reuters Hedge Fund and Private Equity Summit.

“We do see a level of activity, particularly in prime London real estate -- we don’t see prices falling there for example ... which is extraordinary,” Newington said. He added that Foxtons’ lettings business continued to perform strongly.

BC Partners acquired Foxtons for about 390 million pounds in May 2007, shortly before the UK housing market began to cool.

Structured as a leveraged buyout, the deal was backed by 260 million pounds ($381.1 million) of debt supplied by Mizuho 8411.T and Bank of America BAC.N.

Covenants in the bank debt have now been breached, Newington said, but the situation with banks was “stable” as long as Foxtons remains profitable and performs in line with current expectations.

Newington said that unless there was a quick recovery in the housing market, the business may need additional support sometime in the future.

($1=.6822 Pound)

Editing by Simon Jessop