5 Feb 2014 14:42
Formation Group PLC
("Formation" or the "Company")
Update on Aldgate East Property Development
On 31 May 2013 Formation made the following announcement: "Julius Properties Limited ('JPL'), as previously announced on 31 May 2012, after receipt of the deferred element of the consideration from the disposal of the mixed use development site at No1 Commercial Street, London will be able to substantially repay the loans provided by JV Finance Ventures Limited in which Formation has a 36.88% equity interest. This shareholding is currently valued on the balance sheet at £6.24 million. The deferred consideration due to JPL is secured by property, with repayment due in equal tranches over a six month period commencing in January 2014."
The Company has now been informed by JPL that, as a result of alleged legal problems in respect of their title to the property at 1 Commercial Street, London E1 7PT ("the Property"), Redrow Homes Limited ("Redrow"), Redrow Real Estate Limited, and HB (HDG) Properties Limited have instituted legal proceedings against JV Finance Ventures Limited ("JV Ventures") and other parties. In such proceedings Redrow seek to set-off an alleged damages claim against their obligation to make the payment of the balance of the purchase price under the contract relating to the sale of the Property.
JV Ventures has instructed its legal advisors to advise on proceedings and to institute a counterclaim to recover the full amount of the deferred consideration together with interest thereon.
The Company will continue to update shareholders on developments as appropriate.
Contact details:
Formation Group PLC - David Kennedy; Chief Executive Officer - 020 7920 7590
NOMAD to Formation Group PLC;
Zeus Capital Limited - Ross Andrews / Andrew Jones - 0161 831 1512