TIDMEFD
RNS Number : 6839E
Eatonfield Group plc
11 April 2011
11 April 2011
Eatonfield Group plc
("Eatonfield" or "the Group")
Proposed sale of land assets and funding update
Eatonfield's board of directors ("the Board") provides the
following update on progress made in respect of the previously
notified negotiations with its banking partners and in relation to
the sale of certain of its land assets. The Board also outlines
below its strategy and objectives for the Group going forward and
plans for an equity fundraising. Subject to satisfaction of the
outstanding conditions noted below, the Board believes that these
developments and this strategy will help to prevent further
deterioration in the Group's financial condition in the short-term
and secure its long-term commercial viability.
Background to the Group's present position
Eatonfield has been in severe financial difficulty since the
summer of 2008. Between that date and the autumn of 2009, the Group
was adversely affected by falling demand for residential property,
which in turn reduced sales of housing units and land and therefore
its ability to service its net debt. Eatonfield also suffered from
falling loan to value ratios reducing the Group's ability to raise
additional debt finance and commercial property market conditions
also worsened significantly during this period.
Market conditions remained difficult throughout 2010. The
Group's cash flows deteriorated further as a result and equity of
approximately GBP1.2 million was raised during 2010 to provide
Eatonfield with sufficient working capital to continue trading.
Brian Corfe and Duncan Syers joined the Board in June 2010 as
Executive Chairman and Group Finance Director respectively. Since
then, Mr Corfe and Mr Syers have been working with Rob Lloyd (Group
Chief Executive) and other members of the senior management team to
address the Group's financial difficulties. The Board's focus has
been on identifying a strategy to achieve a substantial reduction
in the Group's net debt and provide a stable platform for its
future development.
The Board is pleased to announce that, subject to satisfaction
of the conditions noted below, the first part of this strategy is
now almost complete, in summary through the agreement of:
-- the proposed exchange of contracts, to take place shortly,
for the sale of a significant proportion of the Group's residential
land assets to Trilandium Celtic LLP ("Trilandium Celtic"), raising
net proceeds between the date of exchange and 30 September 2014 of
approximately GBP6.65 million. The assets comprise residential land
at seven sites in Wales.
-- Heads of terms for the sale of part of a site at Birkwood
near Glasgow to Trilandium LLP ("Trilandium") for approximately
GBP2.75 million.
-- subject to exchange of contracts over the Welsh sites,
follow-on housebuilding contracts with Trilandium Celtic over 243
units on these sites to commence imminently, with the prospect of
similar contracts with Trilandium over 76 residential units at
Birkwood, providing the Group with a profitable and sustainable
contracting business capable of future growth; and
-- proposed revised facility arrangements with certain of the
Group's banks, such facilities having, in the Board's view,
realistic capital repayment targets, covenant tests and fee
charging structures, thus strengthening the Group's financial
position.
The sale of the Welsh sites has credit approval from Royal Bank
of Scotland plc ("RBS"), which holds a first charge over those
sites. The facility documentation is now in agreed form and
expected to be formally signed within a matter of days. Once this
process is complete, the Board will be in a position to exchange
contracts with Trilandium Celtic. The sale of Birkwood will require
the consent of all banks that hold charges over the site.
The total net proceeds of GBP9.4 million from the sale of the
Welsh sites and Birkwood will be applied to reducing the Group's
net debt, which stood at GBP26.9 million as at 31 December 2010.
Total debt outstanding over the Welsh sites and Birkwood was
GBP6.65 million and GBP2.75 million respectively at 31 December
2010.
As part of the arrangements for the sale, RBS has also agreed to
provide the Group with a GBP0.25 million working capital facility
to support the development of the contract housebuilding operation.
As discussed below, the Board also plans to raise further funds
through the issue of new equity, the majority of which will be used
to clear certain of the Group's outstanding trade creditors.
The Transaction
Overview
Subject to the formal signing of the facility documentation with
RBS, as described above, Eatonfield expects shortly to be in a
position to exchange contracts for the sale of the Welsh sites. The
land assets comprise 243 housing plots. The plots will be packaged
into a number of groups and sold in a series of separate
transactions.
As part of these arrangements, the Group has agreed to build
houses for Trilandium Celtic on the Welsh sites. Pursuant to the
sale of the Welsh sites, Trilandium Celtic will be required to make
cash payments to Eatonfield in line with an agreed schedule between
the date of exchange of contracts and 30 September 2014. Legal
ownership of the plots making up the Welsh sites will only transfer
to Trilandium Celtic once the relevant cash payments have been
received by the Group.
Trilandium and Trilandium Celtic
Trilandium and Trilandium Celtic are specialist residential
developers established in 2009 as limited liability partnerships
and are based in Leeds. Their business models are to acquire rights
to build on residential land without committing substantial capital
to acquire the land in advance.
Trilandium and Trilandium Celtic have provided confirmation to
the Board that they have access to development funding to support
the housebuilding contracts and also has its own cash resources to
finance the initial land purchase payments.
The Welsh Sites
Once exchange of contracts has taken place, the sale of the
Welsh sites will become unconditional in all but two respects:
-- the granting of detailed planning permission on three of the
Welsh sites; and
-- the Board identifying a solution to issues regarding ground
conditions at Cwmanaman Road (one of the Welsh sites).
The Board is confident that the detailed planning permission
required will be obtained, thereby enabling completion of the sale
of the three sites referred to above to take place in accordance
with the schedule agreed with Trilandium Celtic. The Board is also
confident that a solution to the issue regarding ground conditions
will be identified. The Board has made appropriate assumptions in
respect of these matters regarding the timing of the related cash
flows in the Group's financial forecasts.
Subject to these conditions being satisfied, the payments
relating to the Welsh sites (comprising plots for 243 new houses
for a total gross consideration of GBP6.6 million) due from
Trilandium Celtic are expected to be received as set out below:
-- GBP1.0 million during the period from the date of exchange of
contracts to 31 December 2011, of which GBP0.5 million will be paid
during April and May 2011;
-- GBP1.7 million during 2012;
-- GBP2.0 million during 2013; and
-- GBP1.9 million in the nine month period to 30 September
2014.
Birkwood
Heads of terms have been agreed by the Board with Trilandium for
the sale of part of a site at Birkwood. The land to be sold will be
subject to similar arrangements to those for the Welsh sites, with
follow-on housebuilding contracts. In summary, the Board has agreed
to sell 76 housing plots for a total gross consideration of GBP2.8
million, to be paid as follows:
-- GBP0.7 million during the period from the date of exchange of
contracts to the date ending twelve months thereafter;
-- GBP1.0 million during the period between the first and second
anniversaries of date of exchange of contracts; and
-- GBP1.1 million during the period between the second and third
anniversaries of date of exchange of contracts.
Any future exchange of contracts on Birkwood will be dependent
on the granting of detailed planning permission and the consent of
all banks that hold charges over the site.
Contract housebuilding business
Eatonfield has proven expertise in housebuilding, having
completed the construction and sale of 43 houses for Pembrokeshire
Housing Association, four for Tai Cantref Housing Association and
16 for Jenard Properties Limited ("Jenard") over the last 15
months, realising revenues and gross profits of GBP4.9 million and
GBP0.45 million respectively. Brian Corfe has substantial
experience of the housebuilding industry and intends to grow the
Group's business in this area.
Eatonfield and Trilandium Celtic have agreed, negotiated
contracts, for the Group to build 243 houses on the Welsh sites
with an aggregate contract value for Eatonfield of approximately
GBP25 million.
In respect of Birkwood, Eatonfield and Trilandium have agreed
negotiated contracts to build 76 out of a possible 165 houses upon
the granting of planning permission. Eatonfield may also have the
opportunity in the future to build houses on the 89 remaining plots
not subject to these arrangements.
The building of the houses on five of the Welsh sites and at
Birkwood is expected to take between three and five years to
complete. The housebuilding at the remaining two Welsh sites may
take less time.
In addition to these arrangements with Trilandium and Trilandium
Celtic, the Group has, subject to contract, agreed to build out for
Jenard the remaining plots on its sites at Hook in Haverfordwest
and North Park in Cardigan.
Future strategy - summary
Eatonfield (LSE:EFD)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Eatonfield (LSE:EFD)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
