LONDON (Alliance News) - Flying Brands Ltd Friday said it has sold its freehold property at Retreat Farm, Jersey at below book value on the advice of local property agents, citing its own unsuccessful attempts to develop the property, its limited financial resources and the need to repay its loan to Acorn Finance in January 2015.
In a statement, Flying Brands said it sold the freehold property at Retreat Farm, Jersey for GBP1.65 million in cash, comprising GBP1.45 million for the the main glasshouses property to Discreet Holdings Ltd and about GBP200,000 for the sale of the attached parkland to Ruff Properties Ltd.
The amount being paid by Ruff Properties includes a payment of GBP50,000 to settle any potential profit participation payments due from Flying Properties' sale in 2011 of other properties at Retreat Farm to companies associated with Ruff Properties.
According to Flying Brands, the book value of the freehold of Retreat Farm was GBP3 million on December 27, 2013.
The freehold of Retreat Farm generated an income of about GBP100,000 a year in rent, and the group paid about the same amount in interest on its loan from Acorn Finance.
Flying Brands will repay the GBP1.01 million loan from Acorn Finance with the proceeds of the sale. It also will pay the agreed settlement of GBP150,000 to Flying Flowers Pty Ltd, an Australian company, arising from matters relating to the disposal of its gifts business.
Net proceeds of the sale will amount to GBP400,000 after paying Jersey goods and services tax of about GBP80,000.
"The company intends to take a further short period of time to consider the best options for the use of the net proceeds of the sale and for the company and will make a further announcement before the end of the year," Flying Brands said in a statement.
Flying Brands shares were up 10% at 2.75 pence on Friday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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