Countrywide has recently launched a high court case against a Danish businessman for damages following the collapse of its planned sale of consultancy Lambert Smith Hampton to the Monaco-based investor.
In November last year, the estate agency group announced that it had agreed the sale of its commercial property arm to John Bengt Moeller for £38m, with completion due, subject to shareholders’ approval, by 20 January 2020.
Problems with the deal emerged in February, when Countrywide informed investors that completion of the transaction had been delayed because of Moeller “being indisposed during January and due to logistical difficulties relating to the transfer of the requisite completion monies”.
Following protracted efforts to effect completion and after agreeing a revised timetable to complete on more than one occasion, Moeller, chairman of Great Global Holdings, a holding company for businesses including Double Keys property investment manager and German property group Hanseatic Holding, failed to complete the transaction in accordance with the final timetable set for 11 March 2020. This left Countrywide with little alternative but to explore alternative options for the sale of Lambert Smith Hampton.
In a trading statement in March, the group, which owns high street agency brands such as Bairstow Eves and Fulfords, revealed that it was “considering its legal options to pursue Mr Moeller for damages and costs from continuing delay in completion”, adding that it would “update shareholders as appropriate in due course”.
Court documents have now been made public with the particulars of claim confirming that no one was willing to match the £38m agreed with Moeller.
The money generated from the deal was to be used to clear a debt pile of £34.4m, according to the lawsuit.
Countrywide says it is building up additional interest costs as a result of not being able to reduce its debt.
The suit states: “[Moeller was aware that] Countrywide wished to sell its shares in the company as part of a corporate strategy to repay debts and reduce its leverage ratio, and that, if the defendant failed to complete the purchase of those shares, the claimant would be unable to reduce its borrowing in this way.”
Countrywide’s lawyers reportedly claim that the company is entitled to interest on the £38m failed payment between December 2019 and March 2020, which equates to around £294,000, according to the suit. The claimants are also seeking damages to be determined by the court.
The group yesterday announced that it had agreed a £90m deal with private equity group Alchemy Partners, while the company is also seeking to borrow an additional £75m from its existing lenders with a four-year term.
Comments (3)
Classic CWD chasing an empty bucket
He has had 3 UK companies. 2 dissolved One still in receivership
DDL178 LIMITED
Company number 09346200
He has recently started another shell company with a grand sounding title
UNITED ARAB EMIRATES TRADING HOUSE LIMITED
Company number 12540364
Sorry, but I think Countrywide are behaving like big soft nellies here.
As an estate agent, you would think they would know that sales (properties AND busineses alike) can and do fall through at the last minute for no reason other than the buyers have a change of heart, or can’t raise the money that was first promised.
I am also sure that the money Countrywide are racking up on lawyers on this case could be more effectively used to pay down this “debt pile” they keep complaining about.
I completely agree. This is nonsensical. Deals do fall apart all the time and no one gets compensated. It seems they would prefer to plough more money and resources, that they can ill afford to spare, into negativity rather than picking their chins up and looking forwards. An absolute recipe for disaster.