Unite seeks to recover EUR 35m from Icelandic bank

Unite Group, the UK student accommodation specialist, is seeking to recover £30 mln (EUR 35 mln) that was placed on fixed-term deposit with the London branch of Icelandic bank Landsbanki. The funds were accrued following asset sales by the UNITE UK Student Accommodation Fund (USAF) in August this year.

Landsbanki was placed under receivership by the Icelandic government in early October to stave off its collapse. The bank is now under the control and supervision of the Icelandic Financial Supervisory Authority.

Unite said it is pursuing all available channels for the recovery of the funds, 'but the extent and timing of recovery is uncertain at the present time'. Should it prove impossible to recover the funds, the overall investment capacity of USAF at its target gearing level would be reduced by £67 mln to £313 mln.

Unite said that up to £205 mln of this investment capacity is available to acquire stabilised direct let assets from Unite later this year, under the terms of a pipeline agreement between the parties. Unite plans to use the proceeds from the disposal of these assets to reduce its borrowings and maintain its stake in USAF at 20%.