Private equity groups clamour for Swayfields sale

A handful of private equity groups are competing to buy a group of motorway service stations, which is being sold in the latest restructuring of assets backed by Lloyds Banking Group's distressed debt.

Swayfields, which has a portfolio of stations worth £240 million, entered administration this year after a struggle to service its debt. Most of the debt was from loans from Lloyds, although some debt was lent from Deutsche Postbank.

Administrators PwC have entered negotiations with M3 Capital Partners, but other interested parties including Pears family-owned Telereal Trillium, and private fund manager Mountgrange.

M3 is thought to have entered a bid of around £240m for the nine sites in the sale, which is £10 million less than the total debt of £250m understood to be backing the properties.

Accepting that offer would lead to a minimal loss for Lloyds, although the write-down would be relatively limited when considered against other problem loans elsewhere in its portfolio of properties.

Swayfields – the smallest of the major motorway chains – is the latest sale aimed at recovering as much as possible from Lloyds' problem debts. The total yield would be less than six per cent.

The chain's annual revenues were £13 million, but chose to enter administration in March in order to facilitate the restructuring of its profitable operations.

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