05 April 2007
('Widney' or 'the Company')
Proposed sale of land and property at Far Cotton, Northampton and sale and
leaseback of land and property at Lichfield Road, Walsall
Widney today announces that the Company has conditionally agreed to dispose of
its freehold premises at Far Cotton, Northampton and Lichfield Road, Walsall to
Minton Northampton LLP. The Company has also conditionally agreed to lease back
the Lichfield Road Property from the Purchaser. The Lichfield Road Property is
currently occupied by Belcot Tool & Die Limited, a wholly owned subsidiary of
the Company, which manufactures metal press tools predominantly for the
The consideration, in each case payable in cash to the Company by Minton, is
£5.5 million for the Far Cotton Property and £1.5 million for the Lichfield Road
Property. The Lichfield Road Property shall be leased back to Belcot Tool & Die
Limited under a full repairing and decorating lease subject to a schedule of
conditions for a term of ten years at an annual rent of £150,000. The lease
provides for a five year break clause and is subject to five yearly upward only
rent reviews, with a two year guarantee granted by Widney.
The carrying value in the Company's accounts for the Far Cotton Property was
£5,111,419 and £1,692,872 for the Lichfield Road Property, each as at 28
The proceeds from the disposal of the Properties will be used to repay the
Group's borrowings, leaving the Group debt free.
Both the Disposal and the Sale and Leaseback are conditional upon (i)
simultaneous exchange and completion with each other and (ii) the approval of
the Company's shareholders at the EGM.
Information on the Far Cotton Property
The Company acquired the Far Cotton Property in May 2004 from the administrators
of Airflow Streamlines plc for £4m and subsequently sold surplus land for £2.2m.
The Directors believe that the realisation of a further £5.5m justifies the
Board's decision to enter into the Far Cotton Agreement.
Information on the Lichfield Road Property
The Group acquired the Lichfield Road Property in March 2000 as part of the
assets acquired when the Company purchased the entire issued share capital of
Belcot Tool & Die Limited. Belcot subsequently invested in the property to
increase the height and install 50 ton lifting capacity. The Directors believe
the carrying value in the Company's accounts of £1,692,872 justifies the price
to be received by the Company under the Lichfield Road Agreement.
Reasons for the Disposal and the Sale and Leaseback
A serious deterioration in trading at Widney Cabs Limited and the uncertain
outlook caused by a major customer's transfer of its cab manufacture to Europe,
led the Board to determine that its continuing support for Widney Cabs was no
longer in the best interest of the Group. Accordingly, an administrator was
appointed on 22 January 2007.
The Group borrowed monies from Barclays Bank Plc for the purpose of purchasing
the Widney Cabs assets and following the appointment of an Administrator in
respect of Widney Cabs the Group wishes to repay those borrowings The remainder
of the Group continues to be profitable. The sale of the 9 acre Far Cotton
Property, and the sale and leaseback of the Lichfield Road Property will leave
the Group debt free, with a turnover of approximately £20 million.
Application of proceeds
As at 28 February 2007, Widney Plc had outstanding medium term loans totalling
£3.2m and the Group had an outstanding working capital facility of approximately
£3m, each with Barclays Bank plc. The proceeds of the disposals of the
Properties will be applied, to the extent necessary, to repaying these
The Directors consider the proposed Disposal and Sale and Leaseback to be in the
best interests of Widney and its Shareholders as a whole and therefore recommend
Shareholders to vote in favour of the Resolution, as they intend to do so in
respect of the shares in Widney owned or controlled by them representing
approximately 21.22 per cent. of the existing issued share capital of the
5 April 2007
Widney Plc Tel: 0121 327 5500
Joe Grimmond, Chairman
Graham Errington, Finance Director
College Hill Tel: 020 7457 2020
This information is provided by RNS
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