SJH.L Regulatory News (SJH)

30 October 2015

Boxhill Technologies plc

("Boxhill" or the "Company")

Joint Venture for Soccerdome Business

Further to the Company's announcement of 7 October 2015, the Company is pleased to announce that terms have been agreed in relation to the proposed joint venture for the Company's Soccerdome football pitch business.

The Company first acquired the Soccerdome business in 2011 for 75,000,000 ordinary shares of 0.1 pence each ("Ordinary Shares"). In 2012 a redevelopment of the surrounding site was announced, with the resulting state-of-the-art Harvey Hadden Sports Village in Billborough, Nottingham ("HHSV") reopening in September 2015. The £16m redevelopment of HHSV is the largest single investment under Nottingham City Council's Leisure Transformation Programme.

Details of HHSV can be found at http://www.nottinghamcity.gov.uk/harveyhadden

The Company is working with Nottingham City Council (the "Council") to open 5 and 7-a-side pitches at HHSV, which will require significant capital investment. The board of directors of Boxhill (the "Board") has decided that its other businesses offer better opportunities over the longer term, and has therefore been exploring alternative options for finance this expansion.

The Board has therefore agreed to the formation of a new joint venture to operate and finance the expansion of the Soccerdome business now that HHSV is open (the "JV"). The JV would remove the capital cost of financing the expansion of the site from the Company's balance sheet, while providing the Company's shareholders with an attractive return on its investment to date. The key terms of the JV, which has been entered into today by the JV partners, are as follows:

· A new joint venture company, Nineteen Twelve Holdings Limited, has been established (the "JV Company");

· The JV Company will have two shareholders: James Christopher Gordon Rose and Soccerdome Limited, a wholly owned subsidiary of the Company (together, the "Shareholders");

· Soccerdome Limited will surrender its existing lease to the Council and the Council will issue a new 45 year lease to the JV Company covering the current the same site, with a requirement under the lease that the site is refurbished and open within 5 months;

· Soccerdome Limited will be issued with 10 A class ordinary shares (the "A Shares"). The A Shares will have the right to receive 100% of the after tax profits of the JV Company by way of a dividend for the shorter of 10 years or when these dividends have totalled £250,000 (the "Period"). At the end of the Period, the A Shares will have the same rights as the B class ordinary shares (the "B Shares") of the JV Company; the remaining share capital of the company, 90 B Shares , are held by Mr Rose. Each A Share and B Share carry one vote;

· Mr Rose's remuneration from the JV Company to be 30% of the pre-tax profits;

· The JV Company will seek to raise finance for the redevelopment by way of third-party debt. Boxhill and Mr Rose will provide any funding that cannot be obtained from third parties in equal proportion and on commercial terms, including any loan guarantees required by a third party lender;

· Neither the JV Company nor the lease on the site can be sold, transferred or sub-let unless both Shareholders agree. Any exceptional activity to also be agreed by both Shareholders.

The JV constitutes a related party transaction under the AIM Rules for Companies, as Mr Rose holds 16.26% of the Ordinary Shares of the Company and is a director of Prize Provision Services Limited, a subsidiary of the Company. The Board consider, having consulted with Allenby Capital Limited, the Company's nominated adviser, that the terms of the JV are fair and reasonable insofar as Shareholders are concerned.

Lord Razzall, Chairman, commented: 

"We are delighted with the Joint venture signed today. It allows Boxhill to retain the value in its investment without a full time management commitment, and releases, to its joint venture partner, the immediate obligation to fund the necessary renovation of the facility while allowing Boxhill to focus on its other business divisions. "

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