30 Aug 2011 15:51
Formation Group plc (the "Company" or "Formation")
Update on Aldgate East Property Development
The Company is pleased to announce that Julius Properties Limited ("JPL"), a Guernsey registered company that owns the property development above Aldgate East Station, London ("Aldgate"), has entered into a conditional agreement for the disposal of Aldgate to a UK national housebuilder.
The conditions of this agreement must be satisfied no later than 22 February 2012 and consideration payable under the disposal agreement is to be split with part payable on completion and part being deferred. The deferred portion of the consideration will all be payable within 30 months after the date of completion.
If JPL completes the disposal of Aldgate, the Directors anticipate that the contingent liability relating to Formation's guarantee to assist JPL in repaying Aldgate East Property Company Limited a maximum of £11.6 million in respect of capital and interest on loan notes will be extinguished.
In addition, if JPL completes the disposal of Aldgate, the Directors also anticipate that JPL will, after receipt of the deferred element of the consideration, be able to substantially repay the loans provided by JV Finance Ventures Limited, the special purpose vehicle set up by Formation and JV Finance Limited in which Formation has a 36.88% equity interest.
There is no certainty that the conditions to the disposal agreement will be satisfied and a further announcement will be made to update shareholders in due course.
Enquiries:
Formation Group Plc:
David Kennedy; Chief Executive Officer - 020 7920 7590
NOMAD to Formation Group Plc:
Zeus Capital Limited - Ross Andrews / Tom Rowley - 0161 831 1512