Dawnay, Day calls in accountants

The London-based investment bank with significant property holdings has appointed Ernst & Young to restructure some of its investments.

Dawnay, Day is the latest investor to feel the impact of the credit crunch after the London firm called in accountants Ernst & Young to restructure some of its investments.

The group, headed by Guy Naggar and Peter Klimt, owns a series of property interests as well as investments in other asset classes. Last week, it sold a 20 percent stake in fund manager F&C Asset Management, reportedly to meet margin calls.

The Financial Times today quoted one person close to the business as insisting that none of the group’s businesses are in administration. However, the newspaper reported that the investment banking division has been put up for sale, in which it owns a 51 percent stake. In addition, the group completes a sale today of its stake in brokerage firm, Dawnay Day Capital Markets. One of the company’s three publicly-listed property arms, Dawnay Day, Treveria, last month announced a strategic review which could lead to the sale of assets or the whole company.

According to multiple reports, Dawnay, Day group has failed to raise critical finance in recent times despite securing a £750 million (€939 million; $1.4 billion) debt refinancing facility at the start of the year.

Among Dawnay, Day’s property and property-related assets is Asquith Day Nurseries, which operates child-care and pre-school education services from 113 sites in the UK. It acquired the business in June 2007. Other current investments also include Stet Hertie, a retail business that operates 74 department stores in Germany. It bought that business from German retailer KarstadtQuelle in September 2005.

In addition, the firm has taken three property companies onto London’s Alternative Investment Market (AIM). Dawnay, Day Treveria, which invests in retail assets in Germany, was highlighted by speakers at the PERE's European conference in June as an example of potential distress to come in the market as a wave of public property owners struggle with falling share prices and higher debt cost. The other two AIM-listed property companies are Dawnay, Day Carpathian, which targets Central and Eastern Europe, and Dawnay, Day Sirius, which invests in commercial property in Germany. The company also has co-investments with Shore Capital in the hotel, restaurant, and day nursery sectors.

Dawnay, Day Sirius, which has lost more than 50 percent of its value in the past 12 months, sought to distance itself from the Dawnay, Day group, saying it was solvent and capable of continuing to perform its duties.