Citi Sells Debt Backed by Perelman NYC Properties at Discount

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Apr 23 2021, 1:52 AMApr 23 2021, 3:54 AMApril 23 2021, 1:52 AMApril 23 2021, 3:54 AM

(Bloomberg) -- Citigroup Inc. has sold loans secured by three of Ron Perelman’s Manhattan properties at a roughly 40% discount, according to people familiar with the matter.

The loans, which were in default with a balance of $193 million, sold for $115 million, the people said, asking not to be named because the matter is private.

Perelman was once one of the world’s richest people with a fortune worth $19 billion. But in recent years his empire has faced daunting financial challenges, including at his cosmetics giant Revlon Inc.

The debt sold by Citi is backed by three adjacent properties on East 62nd Street and includes the offices of Perelman’s investment firm, his duplex residence and the restaurant Fleming.

The loans mature in August 2023. The buyer was undisclosed.

A Cushman & Wakefield team, led by Doug Harmon and Adam Spies, did the deal for Citigroup. Representatives for Perelman and MacAndrews & Forbes, Cushman & Wakefield and Citigroup declined to comment.

MacAndrews & Forbes, Perelman’s investment company, said in July it would rework its holdings in response to the coronavirus pandemic. Perelman sold off a series of investments, including his stake in Humvee-maker AM General.

In September, Perelman, 78, said he planned to “clean house, simplify and give others the chance to enjoy some of the beautiful things that I’ve acquired.”

Among the items on the market -- his Gulfstream 650, a 257-foot yacht and some of his properties. He also struck a deal with Sotheby’s to sell hundreds of millions of dollars of art works.

Some of the proceeds from the art sales were slated to pay down loans from Citigroup. He also had loans from JPMorgan Chase & Co., Bank of America Corp. and UBS Group AG related to his artwork, filings show.

Citigroup continues to do business with Revlon, despite an accidental $900 million wire it sent lenders last year. The infamous payment error in August caused Citi to step in as a Revlon creditor, and forced the bank to revise its results after it wrote down a portion of Revlon’s loan.