Real estate investment trust LXi has snagged £257m from the sale of a 65-year income strip from Thorpe Park and Alton Towers.
The London-listed fund cut the freehold deal with an unnamed “UK institution” and will be granted 999-year leases back.
LXi will then pay the buyer an annual rent of around £8.2m, the company announced yesterday.
The proceeds will be used to fully repay the £232m worth of debt currently secured against Thorpe Park and Alton Towers, as well as Warwick Castle, which are all operated by Merlin.
After 65-years, LXi will have the option to re-buy the freehold, as well as 70 per cent of the rental income from and potential future market value of the theme parks for £1.
“We are delighted to have signed this innovative transaction, which materially reduces the company’s debt levels whilst generating significant earnings accretion,” fund manager Simon Lee said in a statement.
Shares inched 1.7 per cent to 150.6p by afternoon. The fund’s stock price has gained nearly four per cent in the year to date.
The deal follows the drawing of a £385m acquisition facility in July.