(Alliance News) - Ashley House PLC on Monday said it has sold its 50% Morgan Ashley Care Developments LLP interest for GBP2.0 million in cash.
Shares in Ashley House closed down 14% at 4.01 pence in London on Monday.
The stake was sold to the health and community care property firm's joint venture partner, Morgan Sindall Investments Ltd. Of the GBP2.0 million, GBP500,000 is deferred and will be paid to Ashley House in instalments over the next 12 months.
Furthermore, Ashley House has signed an agreement with Morgan Sindall "to work on a pipeline of health, wellbeing and primary care developments across established health partnerships".
Morgan Ashley scheme delays have significantly hurt its cash requirements, and it has required funding from Ashley House and Morgan Sindall since it was created.
In the year to April 30, 2018, Ashley House's share of joint venture profit from Morgan Ashley was GBP310,000.
"Having explored a number of funding solutions including both debt and equity, the company has concluded that the transaction is in the best interests of shareholders. The transaction will satisfy the short term cash requirements and enable Ashley House to restructure and return its focus to its key strengths as a developer of health and wellness buildings, as well as driving opportunities for its majority owned modular business, F1 Modular," said Ashley House.
Under the terms of the deal, Ashley House is restricted from working in the elderly care housing sector for three years. It therefore intends to branch out into adjacent markets like affordable housing and healthcare.
Ashley House Chief Executive Antony Walters said: "The board has reviewed funding and strategic opportunities available for the company and has concluded that the transaction and a re-focus on its key strengths in health development and modular construction are the most suitable options. We look forward to being able to exploit opportunities in these sectors and further developing the company's strategic reach."
By Anna Farley; annafarley@alliancenews.com
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