24 August 2005
UNIVERSAL SALVAGE PLC
Announces Lease and Option Agreement on
Site at Mitchell Road, Corby
Universal announces that its wholly owned subsidiary company, Userve Limited
("Userve"), has entered into a ten year lease and an option agreement on its
former auction site in Corby ("the Property") with Greatline Developments
Limited ("the Purchaser").
The commencing rental of the lease is £256,000 per annum, reviewable on the
anniversary of the lease in each year of the term and increased in line with the
Retail Price Index.
The Property was previously used by the Group as a salvage auction branch and
had been let on short term arrangements since being mothballed in August 2002 as
surplus to Company operational requirements.
The Option Agreement entered into by Userve, Greatline Developments Limited and
National Westminster Bank grants an option to the Purchaser, on payment of an
upfront fee of £160,000, to purchase the Property during the period commencing
on 23 August 2010 and expiring on 22 August 2012 ("the Option Period") for an
amount, in cash, calculated in accordance with the following formula:
(£3,200,000 x A) - £160,000 ("the Price")
A = the Index figure for the month immediately preceding the date of the notice to exercise the
B = the Index figure for the month preceding the date of the Agreement
The Price will be subject to an overall cap of £8 million.
Userve has also granted to the Purchaser a pre-emption right to buy the Property
at the Price if Userve wishes to sell the Property within the period starting on
the commencement date of the lease and ending on the fifth anniversary
thereafter ("the Pre-emption Period"). If the Purchaser exercises its right of
pre-emption, it must do so within 20 days of Userve issuing notice of its
intention to sell and the Purchaser then has a further 90 days in which to
complete the purchase.
If the Purchaser fails to exercise its right of pre-emption, Userve may sell the
Property at arm's length on commercial terms to a third party for a price which
is not less than the Price at any time within a period of 9 months after the
date of Userve issuing notice of its intention to sell the Property to the
Tenant provided that if no such sale to a third party is made within the said
period of 9 months then the pre-emption will continue in full force and effect.
The gross value of the property in the accounts of the Company is £2.6m.
The proceeds of any sale of the property, when received, would be used to reduce
bank borrowings, if any, or to provide additional working capital to the group.
Universal Salvage plc Anne Thomas Company Secretary 01234 762283
Andrew Somerville Group Finance Director 01234 762283
Biddicks Katie Tzouliadis 020 7448 1000