Pre-pack deal behind £227m property sale

Excessive bank debt forced the sale of Aston Student Village (ASV), which was bought in a pre-pack deal by a Singaporean sovereign wealth fund.
Last week GIC and its joint venture partner Unite announced it has bought the portfolio for £227m.
The portfolio is made up of five student accommodation buildings at Aston University, totalling 3,067 beds. ASV will generate gross annual income of around £17m for the 2017/18 academic year.
However has learnt the deal was pushed through as part of a pre-pack administration.
A buyer had been sought for more than a year after a property revaluation put ASV, which is a charitable company, into an insolvent position.
ASV was created as a joint venture between the university, Bank of Scotland, and Operon Student Villages – which was replaced by Derwent Housing Association – to develop and operate the student accomodation at Aston University.
In August 2014, ASV informed Bank of Scotland it had breached clauses in its agreements with the bank that related to insolvency and material adverse change.
The deemed market value of ASV’s assets had been reduced, which resulted in its liabilities becoming greater than its assets.
ASV then began a restructuring process led by Martyn Everett as chief restructuring officer, with accounts filed recently showing he was paid £520,000, including a £50,000 bonus, for the 18 months to January 2016.
The Bank of Scotland, which was owed £288.7m, pushed for a sale of the assets from late 2015 with the property portfolio being openly marketed from January 2016.
A preferred bidder was identified and negotiations led to Deloitte’s Matt Smith and Matt Cowlishaw being appointed administrators on February 9 and a sale was immediately completed as a pre-pack.