Last checked at 5 Jan 2016 14:50
5 January 2016
K&C REIT plc
("K&C REIT" or the "Company")
Disposal of 24 Martingale Chase, Newbury
K&C REIT plc, the residential real estate investment trust ("REIT") group, is pleased to announce that the Company has exchanged contracts for the disposal of its property at 24 Martingale Chase in Newbury, Berkshire ("24 Martingale") on the open market for a total cash consideration of £285,000. The sale is expected to complete on 22 January 2016. 24 Martingale is a two-bedroom house that provided a gross monthly rental income of £1,015 to the Company and was acquired in March 2014 for £250,000 before costs.
K&C REIT acquired three properties in Berkshire, including 24 Martingale, to make up its initial portfolio prior to admission of its ordinary shares to trading on AIM on 3 July 2015. As stated in the Company's AIM Admission Document, these properties were not intended to form a material part of the Company's property portfolio and the Directors of K&C REIT are currently looking to sell the one remaining property, having sold 10 Glebelands, Thatcham in November 2015.
The net proceeds of the sale of 24 Martingale would ordinarily be used to repay the £228,000 outstanding under the 7 March Loan Notes and 14 March Loan Notes issued by the Company (and as defined and described in its AIM Admission Document dated 30 June 2015) (the "Loan Notes") in accordance with the terms of the Loan Notes and as agreed with the Loan Note holders on 25 June 2015. However, the Company has agreed a new repayment date with the Loan Note holders of the earlier of i) 28 April 2016; ii) the sale of the Company's property at 49 and 50 Cheap Street, Newbury; or iii) upon completion of a fundraising of at least £3.5 million. In return, the Company will pay interest of 10 per cent. per annum calculated daily from 22 January 2016 (or the completion date of the 24 Martingale sale), payable on repayment of the Loan Notes. In view of the Company's ongoing discussions for potential acquisitions, including the project where the Company has exclusivity as referred to in the Chairman's Statement in the 2015 Annual Report, the Board of K&C REIT believes it to be in the best interests of the Company to extend the repayment date of the Loan Notes to provide flexibility in respect of the funding of future acquisitions.
Oliver Vaughan, a director of the Company, is a holder of 7 March Loan Notes, with approximately £62,000 currently outstanding. Accordingly, the variation of the terms of the Loan Notes to extend the repayment date represents a related party transaction under the AIM Rules for Companies. The independent directors of K&C REIT (for this purpose, being all the Directors of the Company except for Oliver Vaughan) consider, having consulted with the Company's nominated adviser, Allenby Capital Ltd, that the terms of the transaction with Oliver Vaughan are fair and reasonable insofar as shareholders are concerned.
Contacts:
K&C REIT plcTim James, Managing Director | info@kandc-reit.co.uk+44 (0) 7768 534 641www.kandc-reit.co.uk |
Allenby Capital LimitedJeremy Porter/James Reeve | +44 (0) 20 3328 5656 |
Yellow Jersey PRPhilip Ranger/Dominic Barretto | +44 (0) 7768 534641 |
Notes to Editors:
K&C REIT's objective is to build a substantial residential property portfolio that generates secure income flow for shareholders through the acquisition of SPVs (Special Purpose Vehicles) with inherent historical capital gains. The Directors intend that the group will acquire, develop and manage residential property assets in Central London and other key residential areas in the UK.