Home Reit, the embattled landlord focused on housing for the homeless, has announced plans to wind down the business.
Company shares have been suspended for the past 18 months, and it has been selling properties at steep discounts to address its debt issues, with primary lender Scottish Widows already demanding repayment.
Michael O’Donnell, the property firm’s chairman, 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.”
Back in October 2020, the company, which floated on the London Stock Exchange, raised £850 million to build a portfolio that included 12,000 beds for homelessness charities and housing associations.
However, a revaluation by an external consultancy revealed that the properties were worth less than half of their original price.
In efforts to reduce its debt from £220 million to £115 million, Home Reit sold hundreds of its flats and houses.
Now, its current portfolio is valued just under £300 million and includes fewer than 1,500 properties.
The board has indicated that what remains of the portfolio would be too small to attract serious investors.
Home Reit will hold a shareholder meeting later this summer to vote on the proposed wind-down plan.