Grontmij has reached a tentative agreement with Holland Ontwikkel Groep BV on the sale of part of its real estate development activities in the Netherlands. The transaction will be concluded towards the end of the third quarter or beginning of the fourth quarter of 2005.
Holland Ontwikkel Groep BV, based in Twello, is one of the larger real estate developers in the Netherlands. This takeover will allow Holland Ontwikkel Groep to strengthen its position in the Dutch market.
In its press release of 11 March 2004, Grontmij announced that it would gradually reduce the scope of its capital- intensive activities, concentrated in Development & Operations, by means of divestments in 2004 and 2005. The proceeds will initially be used to further reduce interest-bearing debts or strengthen the cash position to enable investment in the growth of Consultancy & Engineering.
The intended sale of real estate development activities to Holland Ontwikkel Groep is a further step in the divestment process. Approximately 70% of the staff and 50% of the projects in the Netherlands will be taken over by Holland Ontwikkel Groep. The cash inflow is 7 million and the transaction is based on book value.
Grontmij will sell the other projects to third parties or complete them itself. Holland Ontwikkel Groep has a call-option on some of the other projects. In case this call-option is fully exercised, the maximum additional cash inflow will be 7 million.
As part of the process of divesting the capital-intensive activities, from the end of 2004 until now Grontmij has sold subsidiary Delgromij (mineral extraction) and its participating interests in SBI Friesland and Vagron (both waste management).
The divestment of the other real estate development activities is going ahead full speed. However, the complexity and composition of the business concerned do require due care. We expect to finalise the divestment of the real estate development activities in 2005.