Northamber Plc ("Northamber" or the "Company")
Purchase of Property
Northamber announces that on 5 April 2012 it entered into a contract to purchase the freehold of Unit D300 Brooklands Industrial Estate, Weybridge, Surrey, KT13 0YX the "Premises" from IPT Property Holdings Limited for the sum of £6,350,000 plus costs. The Premises have been used by the Company principally as the warehouse for its operations with offices incorporated.
The Company's lease over the Premises currently has two years six months remaining and the freehold purchase has been a long term objective of the Company. In the past few weeks, the current owner initiated the sale of the Premises, enabled by the appearance of a developer who wished quickly to contract to purchase and re-develop the site. Northamber, with its substantial cash resources, was in a position to negotiate with the freeholder on the basis of a very swift cash transaction and thus secure the purchase for the Group.
Due to the size of the consideration payable in respect of the purchase of the Premises, the transaction represents a Class 1 acquisition for the Company.
However, as a result of the Company needing to address these commercial pressures, the directors concluded it was necessary to enter into a binding agreement to secure the purchase of the Premises in short order and they therefore apologise to Northamber shareholders for being unable to seek their approval in advance of the transaction. As will be appreciated from the above statement, time was critical in completing the transaction. To have requested the time necessary for a General Meeting would have been incompatible with being able to successfully conclude the competitive negotiations.
A 10% deposit was made on 5 April 2012 on exchange, and the balance is due on completion which is to be on 23 April 2012. The total consideration is payable in cash from the Company's own resources.
Prior to entering into the contract to purchase the Company obtained a market value on the Premises from an independent valuer who valued the Premises at £6,300,000.
The Premises comprise a site of over 5 acres with open boundaries on three sides and located within the original Brooklands race circuit. It has one principal warehouse structure and ancillary offices. The building has a gross square footage of approximately 77,600 sq ft.
The Premises have been occupied by Group since December 1999 when we took assignment of the original 35 year lease. That lease would have expired on 28th September 2014. During the period the Company has occupied the Premises, it has substantially modified them to remove the previous asbestos and damaged cladding and to enable its operations to be carried out effectively and efficiently.
Prior to purchase the rent was £601,000 per annum, payable quarterly on the normal quarter days. Following completion of the purchase of this site, these ongoing rental costs will no longer be incurred by the Company.
The purchase of the Premises will enable the Company to:-
a. Secure the tenure of the premises for its warehousing operations and avoiding the need for relocating its business elsewhere
b. Cease paying a rent it was formerly paying for the use of the Premises
c. Utilise some of the Company's cash resources to provide a better return on its funds
d. Provide a conversion of some current assets into tangible and value retaining fixed assets
e. Potentially provide further consolidation opportunities for the Company's use of its resources in the future
In the opinion of the directors, the undertaking to purchase of the Premises was a sound commercial and financial decision for the benefit of the Company, its staff and its shareholders.
A circular setting out more details of the transaction, when approved by the UKLA will in due course be issued to shareholders seeking their ratification of the transaction. The directors consider the transaction to be in the best interests of shareholders as a whole and, accordingly, intend to vote in favour of the resolution so proposed in respect of their entire holdings of 17,313,295 ordinary shares in the Company, representing approximately 61.48% of the issued share capital of the Company.
For further information please contact:
Northamber plc 020 8296 7000
Fox-Davies Capital Limited 020 3463 5000
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