After months of speculation, Ask Developments today announced it has abandoned plans to sell a stake to Infinity Asset Management and agreed a refinance deal with the Co-operative Bank instead.
The deal takes the form a management buy-out of the entire share capital of the company including the 25% stake held by Morgan Stanley Real Estate Fund.
The MBO is led by existing directors Ken Knott and Simon Bate and the senior management team. No value was disclosed for the size of senior debt facility agreed with the Co-operative.
Knott said: "In light of the liquidity challenges facing the sector, which are unlikely to abate in the short term, we have been exploring various options to strengthen the company's capital resources in order to ensure that we can fully and properly support the portfolio going forward.
"Ultimately, an MBO supported by our long-term banking partner the Co-operative Bank represents the very best fit in terms of maintaining the loyalty and commitment of an outstanding development team and putting the business on a sound financial footing for the longer term.
"This announcement represents a huge vote of confidence in the company and could not have come at a better time in terms of providing an excellent platform on which to build upon the recent success stories at First Street and Central Park which have seen the company secure Manchester City Council for 140,000sq ft at its flagship No 1 building and Greater Manchester Police for its new 250,000sq ft headquarters – two of the largest occupier-led transaction in the North West in 2009."
Keith Alderson, director of corporate banking at the Co-operative Bank, said: "The bank is fully committed toand believes in the Ask Developments team and its long-term business plan, and we very much look forward to working with the management team in this new shareholder structure.
"The refinancing shows that even in today's uncertain economic climate, we're still very much open for business and working with companies with impressive business strategies, such as Ask Developments. We are in a strong position to provide funding for existing and new customers."
The agreement of new working capital facilities with the Co-operative Bank will enable Ask to fully support its forward business plan, and to sustain, develop and grow its impressive portfolio of development sites and schemes in the North of England.