Quintain Estates and Development PLC today announced that contracts have been conditionally exchanged with Palace Capital plc, an AIM-quoted company, regarding the sale of Quintain Signal Member A Ltd, the owner of the SeQuel regional property portfolio, along with an additional property, Gelderd Point in Leeds. The Proposed Disposal is conditional upon approval by Palace Capital’s shareholders at a general meeting to be held on 18 October 2013 and the completion of a £23.5 million (approx. €27.87 million) placing by Palace Capital to part-fund the acquisition.
The agreed purchase price for Quintain’s interest1 in the business is £39.05 million (approx. €46.31 million) with normal adjustments for working capital. At 31 March 2013, the comparable gross asset value for Quintain was £42.42 million (approx. €50.3 million). For the year ended 31 March 2013, the business being disposed by Quintain made a loss before tax of £11.8 million (approx. €14 million).
As part of this transaction, £550,000 (approx. €652,200) of the net proceeds will be used to subscribe for shares in Palace Capital (approximately 2.5% of the enlarged issued share capital of Palace Capital). The balance of the net proceeds will be used to reduce the Company’s debt.
The Palace shares subscribed for by Quintain will be subject to a lock-in for 12 months after completion and subject to orderly marketing arrangements for a further 12 months after that period.
This transaction does not include Stadium Retail Park, which was valued at £13.8 million (approx. €16.37 million) at 31 March 2013, and is owned by Signal Property Investments Two LLP. Richard Stearn, Finance Director of Quintain, said: “We are delighted to have agreed this transaction which disposes of the majority of our residual regional investment property business. The sale is in line with our strategy to exit non-core assets outside London, reduce group debt and intensify the focus on our London development and investment business and principal asset management activities.”