Surplus Properties
Client: Rentokil Initial plc
Project: Exit from large leasehold liability
Commercial Imperative:
Resulting from a corporate acquisition, Rentokil inherited a non-operational leasehold industrial estate made up of several poor quality buildings. Responsibilities included considerable environmental and dilapidation liabilities as well as significant ongoing cash drain.
CPA Role:
CPA was asked to review Rentokil’s options to reduce annual shortfalls and minimise ongoing liabilities until lease expiry. Analysis gave transparency of the true situation and provision coverage. Background research showed the property being owned in a short term property fund.
The Result:
CPA helped Rentokil prepare its financial planning and negotiating position to exploit the moment when the freeholder was expected to sell. Thereafter, CPA arranged for a third party to purchase the freehold supported by a reverse premium from Rentokil which effectively extinguished all liabilities and allowed significant provision release.