Carillion has announced the disposal of the group’s 66.67% shareholding in Ask Real Estate Limited (“AREL”), and a shareholder loan made by Carillion Construction Limited to AREL’s subsidiary, Ask Central Limited; and 50% interest in Ask Carillion Developments LLP (“ACD”), to one or more wholly owned subsidiaries of Dukehill, for aggregate cash consideration of €15.6m (£13,8m).
€1.13m (£1m) of the cash consideration is contingent on the sale of 100 Embankment and will be paid by Dukehill within 5 business days of signing of the sale documentation in relation to this.
AREL and ACD (through their wholly owned subsidiaries and other associated entities) carry out commercial property development activities, together with various partners, in the North of the UK, including Manchester, Liverpool and Leeds.
For the 2016 Financial Year, the interests that are the subject of the transaction contributed €4.65m (£4.1m) of revenue,€13.17m (£11.6m) profit before tax, and €21.79m (£19.2m) gross assets as at 31 December 2016. The contribution to profit from Carillion’s interests in AREL and ACD can vary significantly from year to year. The transaction is expected to generate a modest profit on disposal, and the interests being sold were not expected to make a material contribution to overall group profit for 2017.
The transaction consideration will be applied in reducing the group’s overall leverage position and, following the Transaction, AREL will be deconsolidated from the group’s accounts. AREL managing director, John Hughes and finance director, Jonathan Cross, who together own 33.33% of AREL, will retain their executive positions.
Commenting, Keith Cochrane, Interim Chief Executive, said: “We are pleased to be able to announce further progress. Much remains to be done, and we are continuing to execute our plans to refocus the business, reduce cost and strengthen our balance sheet.”
