Unite tries to rescue £30m in Icelandic account

The student accommodation fund operated by the UK's UNITE Group has £30 million of asset sale proceeds in the London branch of Landsbanki, the Icelandic bank that has plunged into a form of administration. The firm says it is doing all it can to recover the money.

The UNITE Group, which specilaises in student accommodation in the UK, has been caught up in the collapse of Icelandic bank, Landsbanki.

The company says it has £30 million (€37 million; $48 million) proceeds from as asset sale in August deposited into the London branch of the bank that has been put into a form of receivership by Iceland's government, and that is it unsure how much if any of the money it can recover.

The money was placed into the account following a sale in August of 11 assets for £178 million on behalf of its Unite Student Accommodation Fund (USAF).

In a statement to the London Stock Exchange, the firm said £30 million of the proceeds were placed on a fixed term deposit and represented 3.5 per cent of the total assets of the fund. “On behalf of USAF, UNITE is pursuing all available channels for the recovery of these funds, but the extent and timing of recovery is uncertain at the present time,” it said. It added that if it failed to recover the funds, the overall investment capacity of the fund at its target gearing level would be reduced by £67 million to £313 million.

The group informed its shareholder of the problem on Tuesday this week.