MEPC moves to cut high interest costs

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MEPC, the property group which recently ended merger talks with rival Hammerson, yesterday took a further step towards putting its house in order by cutting the high interest costs taken on at the height of the 1980s boom.

Spurred by the appointment of James Dundas as finance director last month, the group has cancelled expensive interest rate swaps covering all its debt in a move which will result in an exceptional charge of pounds 73m in this year's figures.

Despite a pledge by the company to hold the dividend at 20p for 1996- 97, the shares fell 2p to 457p yesterday as analysts cut their net asset value forecasts by around 10p to 483p for the 12 months ending in September.

Unwinding the swaps will reduce the amount of fixed-rate debt on MEPC's balance sheet to 60 per cent and provide a "cap and collar" arrangement on another pounds 200m. It is expected to save pounds 19m in 1998, falling to pounds 16m the following year, with continuing benefits up to the year 2010.