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Pendragon raises funds through property deal

Pendragon has entered into a £400 million sale and lease-back deal with Aaim, the property fund.

The joint venture affects 115 of Pendragon’s sites which includes a large part of its 390 dealer sites, its vehicle-repair depots and its head office near Nottingham.

Pendragon will rent back the properties on long lease agreements ranging from 18 to 25 years.

The dealergroup is expected to realise over £300m from the deal, according to The Sunday Times. The announcement comes after Pendragon announced a profit warning last month, its third since November 2006.

Analysts are concerned that Pendragon has fared worse than its rivals Inchcape and Lookers and has struggled to integrate last year’s £504m purchase of Reg Vardy.

Aaim said Pendragon was a good bet for investors despite the recent profit warnings. The deal is backed by Bank of Scotland Corporate, which has a joint-venture fund called Symmetry with Aaim.

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