utter carnage, page-32

Valad cuts jobs, investment values fall
23/01/2009 12:00:00 AM. | James Bridie

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Valad Property Group (VPG) said 25% of its global headcount would be made redundant in a raft of measures aimed at reducing costs. The company said that it had agreed to a debt-for-equity swap with Scarborough Vendors and raised the possibility of writedowns on its assets.

The property investment group suggested the current economic climate could see the $610 million book value of its VCS and Crownstone investments written down.

"Having regard to the continuing rapid deterioration in credit and property market conditions over the last six months, Valad believes that the recovery of its VCS and Crownstone book values are at significant risk," the company said.

The company earlier this year sold its stake in the M4/M7, with a book value of $82.4 million, for $65 million.

In December the company also sold 15 Australian and New Zealand properties for a discount of between 8% and 14% to book value. The proceeds would be applied to reducing debt, the company said.

Valad also said that it was making around 25% of its staff in Asia Pacific and Europe redundant, primarily from its asset sourcing, development teams and non-core business lines.

The property investment group said in addition Asia-Pac CEO, Jeff Locke and head of corporate affairs, Rebecca Thompson would be leaving the company. Other executives had agreed to pay cuts as a part of a restructuring aimed at saving 20% in overheads the, company said.

The value of these redundancies would be more than $30 million annually and would be realised fully in the 2010 financial year, the company added.

Valad said that investors in the 470 million euro European Industrial Property fund ("EIP") have voted in favour of extending the effective fund life to 2013.

Valad also said that it had come to an arrangement with Scarborough Vendors, to trade 30 million pounds of the total 37 million pounds owed for equity. The equity swap would increase Scarborough Vendor's stake in the company to 19.9% the company said. The payment for the remaining debt would also be pushed out to 2013 Valad said.

"The effect of the proposal will be to improve Valad's liquidity, and as a consequence Valad's board is favourably disposed towards the proposal," the company said.