Review could save branch closures at Foxtons

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by Lin Freestone

The private equity buyer of Foxtons’ estate agencies, BC Partners, has appointed NM Rothschild to carry out a review of the business.

Foxtons, which currently has 1,500 staff and 24 branches in the London area, was sold by its founder, Jon Hunt, for £360m. Shortly after the acquisition by BC Partners in May 2007, the property market began to experience difficulties as a result of the credit crunch.

The estate agency chain has an annual interest bill of £26m on a £250m loan from the Bank of America and Japanese bank Mizuho. The review’s options to be considered could include a re-negotiation of current short-term loans into longer-term debt to improve cash flow and provide more available working capital.

Another option could involve branch closures and redundancies.

It is speculated that Bank of America and Mizuho, which have failed to syndicate the vast majority of their debt, have appointed Close Brothers to advise them on how to preserve as much of their investment as possible.