18 Jan 2012 14:26
Formation Group plc ("Formation" or the "Company")
Update on Aldgate East Property Development
As announced on 30 August 2011, Julius Properties Limited ("JPL"), a Guernsey registered company that owns the property development above Aldgate East Station, London ("Aldgate"), had entered into a conditional agreement for the disposal of Aldgate to a UK national housebuilder (the "Disposal").
The two conditions of this agreement had to be satisfied by no later than 22 February 2012. The consideration payable under this agreement was 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 from the date of completion.
As announced on 1 December 2011, one of the two conditions relating to this agreement had been satisfied. The Directors are pleased to announce that the remaining condition has now also been satisfied and the Disposal has been completed.
The completion of the Disposal has enabled 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, to be extinguished.
In addition, the Directors also anticipate that JPL will, after receipt of the deferred element of the consideration, be able to substantially repay the loans (the "JPL 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.
As announced on 2 December 2010, Formation has outstanding loans to JV Finance Ventures Limited of £6.7 million. The loans attract interest of 10 per cent. per annum and the Directors anticipate that these would be substantially repaid if the JPL Loans are repaid in due course.
Contact Details
Formation Group PLC
David Kennedy
Chief Executive Officer
Tel: 020 7920 7590
NOMAD to Formation Group PLC
Zeus Capital Limited
Ross Andrews Tel: 0161 831 1512
Tom Rowley