Kier acquires sole ownership of property portfolio
14 April 2011
KIER ACQUIRES SOLE OWNERSHIP OF REAL ESTATE PORTFOLIO
Kier Group plc ("Kier") announces that it has agreed to acquire Lloyds Banking Group's 50 per cent. interest in their jointly owned portfolio of real estate assets.
The assets are owned by Kier Developments Limited ("Kier Developments") and its subsidiaries. As a result of the transaction, Kier Property Limited, a subsidiary of Kier, now owns the entire issued share capital of Kier Developments.
The aggregate consideration for the transaction which is payable to the sellers (Bank of Scotland plc and Uberior Ventures Limited, each of which forms part of Lloyds Banking Group) is £91 million, of which £35 million was paid in cash on completion, £30 million will be paid in cash in October 2012 and £26 million will be paid in cash in October 2013. The consideration, which was based on an independent valuation of the assets, also releases Kier Developments and its subsidiaries from all debt payable to Lloyds Banking Group.
The portfolio of real estate assets includes:
- two prime office buildings in Cavendish Place and Savile Row in central London;
- a mixture of commercial and residential land in Frimley, Swindon, Southampton, Heathrow, Uxbridge and Ashford;
- a retail development in Chichester which is currently expected to have been sold by 30 June 2011; and
- two industrial units in Weybridge, which are expected to be sold shortly, and a further industrial unit in Romford.
Kier intends to pursue a strategy of developing and disposing of the assets, and has re-valued the portfolio accordingly, and as a result expects to generate positive returns from the portfolio. This strategy also means that the transaction is not expected to have a material impact on the Kier Group's average cash position.
The audited consolidated net assets and the audited consolidated gross assets of Kier Developments as at 30 June 2010 were £(4.0) million and £168.0 million, respectively. For the financial year ended 30 June 2010, Kier Developments reported a consolidated gross profit of £2.5 million, which resulted in a net loss before tax of £2.7 million.
Kier Group plc's Chief Executive, Paul Sheffield, commented: "We would like to thank Lloyds Banking Group for its involvement in the joint venture over the last nine years. We are delighted to conclude this transaction, which will offer exciting development opportunities and create significant value for the whole Group over the next few years."
Ends
Contacts:
Haydn Mursell
Group Finance Director
Kier Group 01767 640111
Faeth Birch
Conor McClafferty
Finsbury 020 7251 3801
This information is provided by RNS
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