Ashley (Laura) Hldgs PLC Acquisition of Property in Singapore (6423R)
June 30 2015 - 5:15AM
UK Regulatory
TIDMALY
RNS Number : 6423R
Ashley (Laura) Hldgs PLC
30 June 2015
30 June 2015
LAURA ASHLEY HOLDINGS PLC (the "Company")
Acquisition of Property in Singapore from Ho Bee Realty Pte
Ltd
Laura Ashley establishes Asian Headquarters
The Company's wholly owned subsidiary, Laura Ashley (Asia) Pte
Ltd ("Laura Ashley Asia"), has today exercised the Option to
purchase a commercial property in Singapore (the "Property") for a
cash consideration of Singapore Dollars ("SGD") 66 million
(approximately GBP31.1 million at the exchange rate of GBP1 : SGD
2.119) (collectively referred to as the "Acquisition"). The
Acquisition will be completed 4 weeks from today's date
("Completion").
The Acquisition will be partially funded by a SGD 42.9 million
debt facility provided by DBS Bank Limited secured against, inter
alia, the Property. The remaining consideration of SGD 23.1 million
will be funded out of the Company's cash reserves.
Background to and benefits of the Acquisition
As at 31 January 2015, the Company had 205 stores in its UK
property portfolio and 303 franchised stores in 30 territories
worldwide. International franchising and licensing has increasingly
become an important part of the business as it already accounts for
10.3% of total revenue. In line with the Company's long-term
expansion strategy, the Board has identified significant growth
prospects for the Group in Asia.
The Company already has strong franchise partners in Malaysia,
Taiwan, Japan, South Korea, Hong Kong and Australia. However, in
order to take advantage of the opportunities in Asia, in particular
China and India, the Company needs to establish a strong regional
commercial and operational presence.
The Company is now in a position to invest in an Asian
headquarters and believes that Singapore, with its stable political
and economic situation, is the ideal location from which to manage
its Asian operations. Asia has been experiencing consistently
steady and attractive economic growth. It is anticipated that
consumption in Asia will likewise increase and over time, the
Group's international operations will account for an increasing
percentage of its total revenue. With the appropriate regional
partners, the Directors believe that it is in the Company's
long-term commercial interest to capitalise on this opportunity in
Asia.
Description of the Property
The Property is a modern 8-storey office building which
comprises net area of 98,254 square feet. It is situated at No 29
New Industrial Road, Singapore, 536213. The Property is located in
the North East region of Singapore and is well connected to the
rest of the island via the Pan Island Expressway, Central
Expressway and Kallang Paya Lebar Expressway. It is also well
served by the public transport network and is a 10-minute walk from
Tai Seng Mass Rapid Transit Station.
Pursuant to a Property Valuation Report prepared by DTZ Debenham
Tie Leung (SEA) Pte Limited, dated 9 March 2015, the Property has
been valued at SGD 66 million. The Company will make a copy of this
report available on its website at www.lauraashley.com.
The Property is wholly owned by Ho Bee Realty Pte Ltd, a company
incorporated in Singapore, unconnected with the Company or its
shareholders, that engages in real estate development. The
Acquisition will be made by the Company's wholly owned subsidiary,
Laura Ashley Asia. A sum of SGD 6.6 million will be paid upon the
signing of a Sale and Purchase Agreement, followed by the balance
payment of SGD 59.4 million upon Completion of the sale which will
be four weeks from the date of the Sale and Purchase Agreement.
Financing of the Acquisition
The Company will finance the costs of the Acquisition by using
SGD 23.1 million (GBP10.9 million) from reserves, combined with a
new debt facility of SGD 42.9 million (GBP20.2 million). This will
be settled over a 15 year period in 180 instalments of SGD c297k
(GBP140k). The cost of finance is agreed at 3 month Singapore
Interbank Offered Rate ("SIBOR") plus 2% per annum. The total
acquisition cost to the Company, including Goods and Services Tax
("GST") and stamp duty, will be approximately SGD 73.0 million
(GBP34.5 million).
Financial effects of the Proposed Acquisition
Upon Completion, the value of the Company's fixed assets will
increase by approximately GBP32.1 million, cash balances will
decrease by approximately GBP15 million in the first year of
purchase and the Company's long-term liabilities will increase by
approximately GBP20.2 million. Over the entire loan period of 15
years, the total cash outflow, in terms of principal and interest
payments for the Acquisition, will be approximately GBP25.2
million. The impact on earnings for the Financial Years 2015/2016
and 2016/2017 will be negative GBP0.3million and negative
GBP0.6million respectively.
Enquiries:
Kwan Cheong Ng / Seán Anglim Laura Ashley 020 7880 5100
Anita Scott / Helen Smith Brunswick 020 7404 5959
Richard Redmayne / Tim Medak Cantor Fitzgerald Europe 020 7894 7601
This information is provided by RNS
The company news service from the London Stock Exchange
END
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