ICG urges patience as it struggles to offload assets

ICG Longbow has warned shareholders in its senior secured property debt investments vehicle that they could be in for a wait as it seeks to wind down its holdings. The vehicle has been undertaking an “orderly realisation” of its investments since 2021 and has so far returned almost £54.4m to shareholders. It now has just three debt holdings remaining totalling just over £66m. The loans include £15.5m secured against the four-star Bliss Hotel in Southport, which was placed into administration in December 2022, £25.4m held against the collapsed caravan park company RoyaleLife, and £17m secured against a multi-let office in Bristol. The carrying value of the three investments is now £33.6m, said ICG. Chair of the vehicle Jack Perry said: “Focusing on the sectors relevant to the company’s remaining investments, 2023 is likely to have been one of the worst years on record for the offices sector, housing markets having been impacted by higher mortgage costs, while hotel transactions were also at a 10-year low. “In the context of the above, shareholders will be aware that this has been a difficult period for the company as it seeks to realise its remaining investments in what continue to be challenging market conditions.” He added: “It is important to be clear with shareholders that as the company’s remaining investments are impaired, with receivers or administrators in place, the only exit route is through sale of the underlying assets or loans themselves – refinancing by the borrowers is no longer a plausible route to exit. This exposes the company to the potential for further delay in realisations, with conditions not supportive of quick or easy asset sales.” Perry said the current illiquidity in the market was “clearly unhelpful” for any seller, adding that it was not clear how long it would take for liquidity to improve materially. “Buyers are under no pressure to acquire assets and demand steep discounts, as well as being able to stretch out buying processes where there is a lack of competitive bidding,” he added. “Accordingly, the market environment for the company to exit its remaining investments is expected to remain challenging in the near term.” Instead of entering into forced sales, Perry said the vehicle would focus on actively managing its remaining assets to deliver value to “seek the optimal recovery possible”. “Regrettably there is no easy way to accelerate realisations without compromising unduly on price,” he said. Major shareholders in ICG Longbow Senior Secured Property Debt Investments include Close Brothers Asset Management and Canopius.