Dev Secs extends loan deadline for 3rd time

Development Securities, the UK development and investment company, announced on Tuesday that it has agreed to extend the due date on the £52 mln (EUR 65) of loan notes outstanding from the sale of Oriental City in London to 28 November 2008. 'It is probable that, as part of these financing arrangements, a minority proportion of the monies due under the loan notes may be deferred for an extended period beyond March 2010,' Development Securities said in a statement.

This is the third time the date has been extended to give the private investor who bought the property in 2007 time to complete financing for the transaction. All payments under the loan notes are currently secured by way of a first charge on the property in favour of Development Securities. The buyer has already paid an amount equating to approximately 25% of the disposal price and interest on the loan notes up to 31 July. The monies paid are being held by Development Securities on a non-refundable basis.

Development Securities sold the 9,300 -m² retail property located at 399 Edgware Road, Colindale in September last year after deciding not to proceed with a mixed-use development on the site. The consideration of £68 mln was made up of the loan notes and the rest in cash. The loan notes were payable on or before 30 June 2008.

The latest extension in the deadline for repayment of the loan notes follows on from the previous six-week extension in August to 15 September 2008. The first extension was granted in July.