Last checked at 28 Jan 2016 11:56
28 January 2016
Leeds Group plc
(the "Company")
Related Party Transaction
Purchase of Freehold Warehousing and Office Facility
Leeds Group plc announces that on 28 January 2016 Hemmers-Itex Textil Import Export GmbH ("Hemmers"), the Company's German subsidiary, entered into a binding agreement to purchase the warehouse and office facility at Twentestrasse 1("the Property") that it has been renting since 2005.
The Property offers a total of 6,300 square metres of warehousing and office space constructed on a plot measuring 18,910 square metres. It has been purchased from Mr & Mrs Jӧrg Hemmers. Mr Hemmers is an Executive Director of the Company and has been Managing Director of Hemmers since the Company acquired that business from him in 1999.
Adjoining the Property are two further plots; Hemmers acquired one of these in 2007 and completed a freehold warehouse extension in 2008 on it. The second plot was acquired by Hemmers in 2015 and work is currently underway to construct a further freehold extension that is expected to be completed in May 2016. The purchase of Twentestrasse 1 consolidates all three parts of the facility into the ownership of Hemmers, enabling the Company to take effective future decisions regarding the site as a whole.
The agreed price of €2,700,000 is supported by an independent professional valuation and will be paid as to:
· Assumption of 2 bank loans secured on the property | 1,712,000 |
· New bank debt secured on the property | 500,000 |
· From existing cash resources | 488,000 |
|
|
| €2,700,000 |
The principal terms of the bank loans secured on the property are as follows:
| Loan 1 | Loan 2 | Loan 3 |
| €000 | €000 | €000 |
|
|
|
|
Principal | 1,200 | 512 | 500 |
Interest rate | 3.40% | 2.15% | 1.10% |
Repayment date | 1 March 2020 | 30 March 2018 | 12 months after |
|
|
| completion |
The annual rental currently paid by Hemmers for the Property is €216,000, which will be saved as a result of the purchase. Net of interest on loans secured on the Property and tax, the cash benefit will be approximately €133,000 in the first year following purchase, rising gradually in future years as interest expense falls in line with loan repayments.
Having consulted with Cairn Financial Advisers LLP, the Company's Nominated Adviser, the Independent Directors, who do not include Mr Hemmers since he is involved in the transaction as a related party, consider that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
Enquiries:
Leeds Group plc
Malcolm Wilson, Company Secretary Tel: 07801 224618
Cairn Financial Advisers LLP
Tony Rawlinson / Avi Robinson Tel: 020 7148 7900