Grainger plc Regulatory News (GRI)

10 March 2015

Update: 2014 home reversion portfolio sale

Grainger plc ("Grainger, the "Company" or the "Group"), the UK's largest listed residential property owner and manager, today provides an update on its 2014 home reversions portfolio sale.

As was announced on 10 January 2014, Grainger sold Equity Release (Increments) Limited ("ERIL"), which owns a home reversions portfolio, to Clifden Holdings Limited ("Clifden") on terms which included a deferred consideration ("Deferred Consideration") of £35m (being 40% of the total consideration).

As announced in Grainger's trading update, issued on 5 February 2015, Clifden had not paid the Deferred Consideration by the final payment date of 9 January 2015, and payment has still not been received as of today's date.

Grainger has been in dialogue with Clifden to try to assess its strategy and financial position.

Grainger's security includes the right to the value on optional early termination of certain interest rate caps traded by Clifden. Grainger has now liquidated these caps and the hedge counterparty has contended that the caps have zero value.

Grainger has concluded that, on balance, the most appropriate course of action is to undertake enforcement and exercise its security and rights, which include security over ERIL's share capital.

Accordingly, Grainger yesterday appointed two partners from Ernst & Young as administrators of Clifden and agreed to re-acquire the shares of ERIL (subject to FCA consent).

It is estimated that the net asset value of ERIL (excluding sums owed to Grainger) is in the region of c. £21m.

Work continues to determine the total value recoverable by Grainger, and legal proceedings may be pursued in due course.

Grainger will make further announcements with respect to this matter when appropriate.