HOLDERS of bonds issued by Noel Smyth's UK property vehicle Alburn Real Estate Capital have formed a group that could attempt to block the developer's plan to buy back some of its debt.

Alburn, which wants to buy back up to £184m (€230m) of debt at discounts of between 25% and 84% of face value, said on Friday that some of its holders had formed a "steering committee... for the purposes of assessing options". It is thought that some of the holders of the debt are unhappy at the price being offered by Smyth. Details of the price being offered by Smyth to his lenders were revealed by the Sunday Tribune earlier this month.

The Alburn lenders met in London last week to hear presentations from the company and its advisers about the prospects for the property portfolio. The 45-strong portfolio built up by Alburn across the UK includes offices, retail and industrial space let to clients including DHL, BT, Premier Foods and several British government departments and agencies. The properties were worth €288m in 2007 but an updated valuation of them in April this year put their value at just under €156m, a decline of nearly 53%. The properties are generating rent of about €16.8m.

The deadline to accept the tender offer by has been extended to this coming Friday to allow negotiations to continue.

According to Property Week, the debt buyback is being financed by Highcross, a British fund management company that specialise in property. Smyth will receive a fee for managing the properties.

Smyth is one of Ireland's best-known property developers. Earlier this year he lost a High Court challenge for damages against long-time rival Liam Carroll over the redevelopment of the Square shopping centre in Tallaght in Dublin.