Estate agent Countrywide has secured the £38 million sale of its commercial arm as it battles to cut its debt burden.
The company told investors that it has agreed the sale of its Lambert Smith Hampton arm to Monaco-based property developer John Bengt Moeller.
It said it will use funds from the sale to cut its debt pile by £34.4 million. At the end of June, its net debt was reported as £90 million.
The estate agency, which runs brands such as Hampton International and Bairstow Eves, has said the deal will bring its borrowing to a sustainable level, following a major share placing last year.
Executive chairman Peter Long said: “The sale of the Lambert Smith Hampton commercial business strengthens the group.
“Once completed, we believe that the group will be in a more advantageous position in our core residential market.
“The group remains on course to deliver a full-year result in line with the board’s expectations.”
Countrywide added that it believes the valuation of its commercial unit is “fair”, representing six times the earnings, before tax and interest, of the division.
The group said it has also agreed a new amended credit facility with its banks which will “provide the group with the financial flexibility to execute” its turnaround plan.
Shares in the property company jumped by 15.6% to 5.39p in early trading on Friday after the announcement.