Heron sells shopping centre to Land Securities for pounds 39m

HERON International, the embattled property to petrol pumps group, has sold one of its main UK property assets, the Bridges shopping centre in Sunderland, for pounds 39m to Land Securities.

Heron faces the first of three crucial votes by bondholders on its pounds 1.4bn restructuring on Monday. If the bondholders reject the restructuring Heron will go into liquidation. Yesterday, the company hailed the property sale as evidence that the planned property sell-off contained in the restructuring business plan can work.

Gerald Ronson, chairman of Heron, said: 'The disposal of this property is an indication of our ability to achieve excellent values for creditors from our blue chip property portfolio. I am confident that, as we have in this instance, we will improve upon the values at which the property portfolio has been assumed in the business plan.'

Some critics, however, attacked the announcement of the sale as a publicity stunt in the run-up to the bondholders' meeting in London on Monday. There are two further bondholder meetings: in the Netherlands on 30 June, and the Netherlands Antilles on 5 July.

Gary Klesch, a London-based securities dealer who has traded heavily in Heron bonds, attacked the Bridges sale announcement. 'I'm so embarrassed for Heron's advisers,' he said. 'This is the biggest publicity stunt I've ever seen, just 24 hours ahead of the meeting. The sale doesn't mean anything. Rest assured they searched the entire portfolio for the easiest thing to sell. It's such a cheap shot.'

The Bridges is a prime shopping centre in Sunderland with more than 80 units on a 6.9-acre site. The property has an unexpired lease of 145 years, with the freehold owned by the Borough of Sunderland. Heron bought the Bridges in 1984 and substantially refurbished it in 1987-88.

Land Securities bought the Bridges for pounds 39m based on a net rent passing at completion of pounds 3.2m per annum, representing a yield of more than 8 per cent.