Fire sale likely at Dawnay Day as £2bn empire teeters
Dawnay Day, the privately owned financial services and property giant, faces the fire sale of many of its assets to plug a cash flow crisis.
The £2bn empire, run by Guy Naggar and Peter Klimt, has called in Ernst & Young to restructure several companies within the group following a massive loss incurred last week on the sale of its stake in F&C Asset Management.
Dawnay suffered an £80m-plus loss after it disposed of the majority of its 26 per cent stake – most of which was held through contracts for difference – in heavily shorted F&C following a margin call from its bankers.
Attempts by Naggar and Klimt to raise the cash elsewhere to pay off the position failed and Ernst & Young was called in on Friday to assess options, which include selling off some of its assets to fund the debt.
The crisis is being seen in the City this weekend as proof that the credit crunch is worsening dangerously. As rumours swirled in the City last week, Dawnay was forced to send an email to its staff in a bid to allay fears about the company’s position. Employees were told they would be updated on the company’s future today.
A Dawnay Day spokesman told Morning Wire : “We have appointed Ernst & Young to look at restructuring certain companies within the Dawnay Day group.”