Grant of a Call Option

29 Feb 2008 07:02

Molins PLC29 February 2008 29 February 2008 FOR IMMEDIATE RELEASE MOLINS PLC Grant of a call option re the Disposal of the Saunderton Property (the "Disposal") On 18 July 2007, the Board of Molins PLC ("Molins") announced that it hadconditionally agreed to dispose of the tobacco machinery site at Haw Lane,Saunderton (the "Property") to e-shelter facility services GmbH (the "Purchaser") for a cash consideration, if the transaction had completed, of £18.85m. Thisoriginal agreement has now been cancelled by mutual consent. A new conditional agreement (the "Disposal Agreement") dated 28 February 2008,between Molins and the Purchaser, has now been entered into which takes the formof a call option to purchase the Property, exercisable by the Purchaser on orbefore 30 September 2008 with completion on or before 3 October 2008, for a cashconsideration of £17.5m. After estimated transaction expenses of £0.4m and taxon capital gains of £1.4m, net cash proceeds would be approximately £15.7m. The Disposal Agreement contains a number of the same commercial terms as theprevious agreement, including the lease back of buildings on a rent free basisfor up to three years. However, a number of terms have been amended. Inparticular, all environmental contamination remediation obligations in respectof the Property will become the responsibility of the Purchaser on completion inreturn for which the cash consideration has been reduced to £17.5m. The Disposal Agreement also incorporates the call option noted above anddisapplies all previous conditions, except for that relating to Molins obtainingthe approval of its Shareholders to complete the Disposal, as set out below. As at 31 December 2007, the Property had a net book value of £13.2m and anassociated deferred tax liability of £0.6m, resulting in a net carrying value of£12.6m at that date. In the year ended 31 December 2007, the Group earned income from third partiesfrom the Property of £0.2m before tax, prior to the allocation of central costsand specific operating costs relating to the leased buildings. Net of specificoperating costs, the Property generated profit from third parties of £0.1m inthe year ended 31 December 2007. If the sale of the Property is completed, the net proceeds of the Disposal willbe used to reduce existing indebtedness of the Company, improve the funding ofthe Molins UK Pension Fund by £1m and for investment in new products andfacilities within the Group. Once complete, the Disposal would have the effect of increasing the Group's netassets by approximately £3.7m. The sale of the Property is expected to be earnings enhancing for the Group. Shareholder approval Molins shareholders are being asked to approve the Disposal at a general meetingof the Company on 18 March 2008 for two reasons. First, the approval of shareholders is required as the Disposal constitutes aclass 1 transaction for the purposes of the Listing Rules, as a result of thesize of the Disposal relative to that of the market capitalisation of Molins.In this regard, we stated at the time of the original announcement thatshareholder approval would be sought once the transaction had progressedsufficiently. Secondly, the Purchaser has indicated that it is only prepared to progress thework necessary for it to determine whether to exercise the call option topurchase the Property once shareholder approval has been obtained. Notice of the general meeting to be held at the offices of Molins PLC at 11Tanners Drive, Blakelands, Milton Keynes, MK14 5LU and a circular giving moredetail on the Disposal will be sent to Molins shareholders today. The circular will be available for inspection at the offices of Kimbells, PowerHouse, Harrison Close, Knowlhill, Milton Keynes, MK5 8PA and at the UKLA'sDocument Viewing Facility, which is situated at Financial Services Authority, 25The North Colonnade, Canary Wharf, London, E14 5HS The Purchaser The Purchaser is a subsidiary of Investa Immobiliengruppe, a German privatelyowned project development firm that has managed investments in excess of €3billion since its inception. The Purchaser is the largest provider of datacentre services in Germany, and the intended purchase of the Property is part ofthe execution of its strategy to enter the UK market. Its main facility is inFrankfurt, which provides 60,000 square metres of data centre space, and it alsohas sites in Berlin, Hamburg and Munich. Results for the year ended 31 December 2007 Molins announced its preliminary results for the year ended 31 December 2007today. Enquiries: Molins PLC Tel: 020 7638 9571 Dick Hunter, Chief Executive, David Cowen, GroupFinance Director N M Rothschild & Sons Limited Tel 020 7280 5000 John Byrne Issued by: Citigate Dewe Rogerson Tel: 020 7638 9571 N M Rothschild & Sons Limited, which is authorised and regulated by theFinancial Services Authority in the United Kingdom, is acting for Molins and noone else in relation to the Disposal and will not be responsible to anyone otherthan Molins for providing the protections afforded to clients of N M Rothschild& Sons Limited nor for providing advice in relation to the Disposal. This information is provided by RNS The company news service from the London Stock Exchange