LONDON (ShareCast) - Property asset manager Capital and Regional has earned a bit of breathing space in its quest to refinance its troubled fund, The Mall Unit Trust.

A valuation report for the end of May has revealed that the fund was not in breach of its loan to value banking covenant at that time.

Accordingly, the meeting of unit holders that was supposed to take place today (5 June) has been postponed until 19 June.

The extra two weeks will be used to advance further talks with unit holders on the future strategy and governance of the fund.

The fund-raising by way of open offer is still expected to complete by the end of June, and the legally binding commitments from Norwich Union Life and Pensions and CGNU Life Assurance relating to the offer remain in place at the same price, the company said.

Capital & Regional announced plans on 30 May to raise £286m to pay off the Mall Unit Trust’s existing banking facility with Royal Bank of Scotland in full, by way of an open offer at 101p per unit.

The offer price represents a 45% discount to the April unit price.

The cash is needed to prevent the fund from breaking its covenants. At the end of March the Mall portfolio’s loan to value (LTV) ratio (gross debt/property value) was running at 59%, just one percentage point below the covenant threshold.

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