Proposed Sale and Leaseback & Other News
MFI Furniture Group PLC
26 November 1999
MFI FURNITURE GROUP PLC
Proposed Sale and Leaseback and
Proposed Authority to make market purchases of ordinary shares
MFI Furniture Group Plc ('MFI' or 'the Company') announces today
that it has entered into an agreement, conditional on approval by
its shareholders, with two subsidiaries of MEPC plc ('MEPC')
regarding the sale of ten of the Group's retail parks, and the
leaseback of the associated retail units on those parks which the
Group currently occupies. Under the terms of the sale MEPC will pay
£109.7 million in cash of which up to £5.0 million will be paid
directly to one of the Group's lending banks. The proceeds of the
sale, after expenses of approximately £2.0 million, will be used to
substantially reduce the Group's indebtedness.
The Board is also seeking a general authority for MFI to purchase up
to 59,489,302 of its ordinary shares representing 10 per cent of the
issued share capital of the Company. The Directors do not have any
present plans for the Company to purchase its own shares and will
not use the proposed authority unless they consider that it will
result in a benefit to the Company and its shareholders.
In view of the amount of the proceeds of the sale relative to the
market capitalisation of the Company, the sale and leaseback
requires the prior approval of the Company's shareholders. The
authority to make market purchases of its own shares also requires
authorisation by the Company's shareholders. Accordingly a circular,
explaining the sale and leaseback and the authority to purchase its
own shares and convening two extraordinary meetings relating to the
above, will be sent to shareholders shortly.
Commenting on both the sale and leaseback and the authority to
purchase its own shares, John Hancock, Chief Executive of MFI, said:
'The Board of MFI believes that these are excellent opportunities to
unlock value for shareholders by promoting operational flexibility,
and allowing the Group headroom for future development.'
For Further Information
MFI Furniture Group Plc 01430 430 905
Michael Williamson, Group Finance Director
Brunswick 0171 404 5959
William Cullum
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