Joint Venture

RNS Number : 5432R

Quintain Estates & Development PLC

30 April 2009

 



30 April 2009

Quintain Estates & Development plc

('Quintain' / 'Company' / 'Group')

QUINTAIN ANNOUNCES JOINT VENTURE WITH SUMMIT HOTELS AND 

SALE OF WEMBLEY PROPERTY

Quintain Estates and Development plc has today established a joint venture with Summit Hotels Limited ('Summit') to own and develop Malcolm House and Fulton House at Wembley ('the Property'). The joint venture, which is owned 51% by Summit and 49% by Quintain, will pay Quintain £7.4 million for the Property and Summit has the right to buy Quintain's interest in the joint venture during the next 15 months.

The joint venture, 'Summit Wembley City Hotels Limited', has been created to own and develop the Property as an hotel with a maximum of 262 bedrooms, which will be operated as part of the 'Express by Holiday Inn' franchise. Detailed planning consent has already been granted for the scheme. This development will require no further equity funding from Quintain.

The consideration for the sale of the Property will be satisfied by the issue of £5.15 million unsecured 10% loan notes in Summit Wembley City Hotels Limited to Quintain and £2.25 million in cash. The remaining cash element will be provided by way of subscriptions by Summit and its Jersey based associate, Property Participation Cell C2106D PC, for 10% fixed dividend redeemable preference shares in Summit Wembley City Hotels Limited. In addition, transaction costs of £296,000 will be funded equally by Summit and Quintain. 

The loan notes issued to Quintain will be repayable upon the earlier of 31 March 2012 or six months after practical completion of the development of the Property. The loan notes are non-transferable save that they may be transferred to any purchaser of Quintain's shares in the joint venture.  

Quintain will use the cash proceeds from the disposal to pay down debt as part of the Company's ongoing cash repatriation programme. 

Nick Shattock, Quintain's Deputy Chief Executive, commented:

'The creation of this joint venture with Summit Hotels not only brings further activity to the Wembley  City  scheme  but repatriates cash to the business. Summit has a strong operational reputation, having six awards in the last three years from Express by Holiday Inn, and this agreement will enable us to create an excellent limited service hotel that is entirely suited to the future amenities and location of Wembley and will complement the full service offer elsewhere in Phase 1 of the scheme's development.'

For further information please contact:

Quintain Estates & Development plc

Rebecca Worthington / Cressida Eccleston

Tel:    [phone]

Financial Dynamics

Stephanie Highett / Dido Laurimore / Laurence Jones

Tel:    [phone]

 

END

 

 

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