Disposal
November 19 2009 - 10:51AM
UK Regulatory
TIDMPKW
RNS Number : 8027C
Parkwood Holdings PLC
19 November 2009
19 November 2009
Parkwood Holdings plc ('the Company" or "Parkwood")
PROPOSED DISPOSAL OF CERTAIN SHARES AND SUBORDINATED DEBT HELD WITHIN THE
SPECIAL PURPOSE COMPANIES SUB-GROUP OF PARKWOOD HOLDINGS PLC
This announcement is for information purposes only and does not constitute an
offer or invitation to acquire or dispose of any securities or investment advice
in any jurisdiction. The distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons into whose
possession this announcement comes should inform themselves about and observe
any such restrictions. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction. The
Disposal, because of its size in relation to the Company, is a Class 1
transaction for Parkwood under the Listing Rules and is therefore conditional,
inter alia, upon the approval of the Shareholders. A circular will be sent to
shareholders shortly containing information relating to the Disposal together
with a notice convening the General Meeting, to consider and, if thought fit,
approve the Disposal
Parkwood is pleased to announce that it has conditionally agreed to sell certain
shares and subordinated debt held within the special purpose companies sub-group
of the Company ("the Disposal Interests") to Equitix for a total gross
consideration of GBP6.55 million payable in cash on completion of the sale. The
sale is subject to Shareholder approval at a general meeting and accordingly a
Circular will be sent to Shareholders in due course to seek their authority for
the Disposal.
Description of the Disposal Interests
The Company is proposing to dispose of its equity and subordinated debt holdings
in four SPVs Breckland, Rivendell, Waterfront Leisure and Leisureplan through
which five PFI projects are operated. PPM, a wholly owned subsidiary of the
Company, has (via Leisureplan Limited) an ultimate 100 per cent. shareholding in
each of Breckland and Rivendell and a 50 per cent. shareholding in each of
Leisureplan and Waterfront Leisure. Details of the Group's interests in the
relevant PFI Projects are summarised in the table below:
+----------------+---------------------+------------------+------------------+
| Project | Company | Group's interest | SPV in which the |
| | | in the relevant | Disposal |
| | | PFI Project | Interests are |
| | | | held |
+----------------+---------------------+------------------+------------------+
| Waterfront | Waterfront Leisure | 50% | Waterfront |
| Leisure PFI | | | Leisure |
+----------------+---------------------+------------------+------------------+
| Bexley Leisure | Boxwood Leisure | 50% | Leisureplan |
| PFI | | | |
+----------------+---------------------+------------------+------------------+
| Penwith | Penzance Leisure | 50% | Leisureplan |
| Leisure PFI | | | |
+----------------+---------------------+------------------+------------------+
| Breckland | Breckland Leisure | 100% | Breckland |
| Leisure PFI | Ltd | | |
+----------------+---------------------+------------------+------------------+
| Rivendell | Rivendell Leisure | 100% | Rivendell |
| Leisure PFI | Ltd | | |
+----------------+---------------------+------------------+------------------+
Set out below is further detail of the five PFI projects which are operated
through the four SPVs in which the Group is proposing to dispose of its holding
of shares and subordinated debt:
Waterfront Leisure PFI Project
The leisure centre, based on a site facing the Mersey estuary, was the first in
the UK to be procured under the Government's PFI. The centre offers a six lane,
25 metre swimming pool plus teaching pool, four-court sports hall, squash
courts, fitness suite, dance studio and a cafe.
Bexley Leisure PFI Project
The original scheme involved the refurbishment of two of Bexley's existing
leisure centres, at Erith and Crook Log (Bexleyheath), followed by a contract
variation in 2006 for the construction of a new leisure centre at Sidcup. The
original project reached financial close in July 2003, the Erith and Crook Log
leisure centres became operational in July 2005 and the Sidcup leisure centre
became operational in March 2008.
Penwith Leisure PFI Project
Penzance Leisure was created to undertake the Penwith Leisure PFI Project on
behalf of Penwith District Council. The facility includes a 25-metre swimming
pool with water slide and learner pool, a 6-court sports hall, fitness suite, a
steam room, sauna, crèche, cafe and ancillary meeting rooms. The project reached
financial close in March 2004 and has been in operation since August 2005.
Breckland Leisure PFI Project
This scheme included the provision of a brand new leisure centre in Dereham and
a refurbished leisure centre with additional facilities in Thetford. The
facilities at Dereham include a six lane 25 metre pool, teaching pool, fitness
centre, multi-purpose sports hall, aerobics and dance studio and an indoor
bowling rink, cafe, bar and crèche. The facilities at Thetford include a fitness
centre, saunas and steam rooms, a leisure pool, floodlit synthetic multi-use
games area, facilities for racket sports and aerobics, bar, cafeteria and
function rooms. The project reached financial close in November 2005 and has
been operational since April 2007.
Rivendell Leisure PFI Project
This scheme involved the construction of a new leisure centre in Solihull to
replace Tudor Grange Sports Centre and also the major refurbishment of North
Solihull Sports Centre. Facilities at the new Tudor Grange Sports Centre include
an eight lane 25 metre pool, learner pool, a diving/multi purpose pool, sports
hall, fitness and health suite, cafe and crèche. The project reached financial
close in June 2006. The North Solihull Sports Centre became fully operational in
August 2007 and the Tudor Grange Sports Centre in June 2008.
The Continuing Group provides a range of services to each of these projects
pursuant to leisure operator sub-contracts, life cycle sub-contracts and
maintenance sub-contracts. These agreements will remain in place following
completion of the Disposal.
The Continuing Group has also entered into management agreements in relation to
each of the relevant PFI Projects with the relevant SPVs. These agreements will
remain in place following the Disposal.
Under the sub-contracts, PPM has the responsibility for day-to-day maintenance
as well as lifecycle obligations. The day-to-day maintenance responsibilities
are then further sub-contracted to Parkwood Leisure whilst PPM retains
responsibility for the lifecycle elements. PPM also retains building lifecycle
obligations for Penzance.
Immediately prior to and conditional on the disposal of the Disposal Interests,
the Company intends to reorganise its share and subordinated debt holdings in
D4E. D4E is currently a 25% subsidiary of Leisureplan (and therefore a 12.5%
subsidiary of the Company via PPM). As D4E does not form part of the Disposal
Interests, the intention is that:
* Leisureplan will declare dividends in specie of its shareholding in D4E which
will be payable to PPM and Hendersons as shareholders in Leisureplan;
* Leisureplan will transfer its subordinated debt interests in D4E to PPM and HPFI
with the consideration to be left outstanding as inter-company loans;
* the loan notes in Leisureplan held by PPM and HPFI will be redeemed and the sums
due on such redemption will be set off against the inter-company loans arising
on the transfers of the subordinated debt in D4E; and
* immediately following the payment of such dividends in specie and the transfer
of the subordinated debt, PPM will acquire from Hendersons its entire holding of
equity (12.5% of D4E's equity) and will acquire from HPFI its entire holding of
subordinated debt in D4E.
Following completion of such reorganisation, PPM will therefore be a 25% share
and loan note holder in D4E.
Terms of the Sale Agreement
The Sale Agreement is conditional upon the Resolution being passed no later
than 23 December 2009. This will require the Circular and notice of meeting
required under the Listing Rules to be posted to Shareholders no later than
Monday 30 November 2009.
Application of proceeds
The Company has agreed to sell the Disposal Interests to Equitix for a total
gross consideration of GBP6.55m, payable in cash upon completion of the Sale
Agreement. After adjustments of GBP575,000 for the costs of the Disposal,
GBP350,000 for the cost of acquiring a further 12.5% in D4E and GBP1,583,000 for
the settlement of tax liabilities in the SPC Group, the Company will use the net
proceeds of GBP4,042,000 from the Disposal to reduce the Company's level of
indebtedness.
Following the decision to sell the Disposal Interests in 2008, Parkwood's 2009
interim results for the six months ended 30 June 2009 separate the assets and
liabilities of the Disposal Interests from those of the Continuing Group. The
assets of the Disposal Interests at 30 June 2009 were GBP25.7m while the
liabilities of the Disposal Interests were GBP27.2m. Following the Disposal, the
Continuing Group's cash balance will increase by GBP4.04m and the Continuing
Group's net assets will increase by GBP8.0m. The Disposal Interests contributed
GBP0.28m profit towards the Company's result before tax in the year to 31
December 2008 and GBP0.71m profit in the six months to 30 June 2009. The
Disposal will also result in an exceptional pre-tax profit of GBP5.5 million.
Contact:
For further information please contact either:
Parkwood Holdings plc
Tony Hewitt, Executive Chairman01772 627111.
Brewin Dolphin Investment Banking
Neil Baldwin 0845 213 4730
Definitions
The following definitions apply throughout this announcement unless the context
otherwise requires or unless otherwise stated:
+--------------------+-----------------------------------------------------+
| "Board" or | the directors of the Company |
| "Directors" | |
+--------------------+-----------------------------------------------------+
| "Boxwood" | Boxwood Holdings Limited, a wholly owned subsidiary |
| | of Leisureplan Projects and parent company of |
| | Boxwood Leisure |
+--------------------+-----------------------------------------------------+
| "Boxwood | Boxwood Leisure Limited, a wholly owned subsidiary |
| Leisure" | of Boxwood |
+--------------------+-----------------------------------------------------+
| "Breckland" | Breckland Holdings Limited, a wholly owned |
| | subsidiary of Leisureplan Limited and parent |
| | company of Breckland Leisure Limited |
+--------------------+-----------------------------------------------------+
| "Brewin Dolphin" | Brewin Dolphin Limited, the Company's sponsor and |
| | broker |
+--------------------+-----------------------------------------------------+
| "Circular" | this document to be sent to Shareholders as |
| | required by the Listing Rules |
+--------------------+-----------------------------------------------------+
| "Company" or | Parkwood Holdings plc |
| "Parkwood" | |
+--------------------+-----------------------------------------------------+
| "Disposal" | the proposed disposal of the Disposal Interests |
+--------------------+-----------------------------------------------------+
| "Disposal | together the Company's holdings of shares and |
| Interests" | subordinated debt in: |
| | (a) (via PPM and Leisureplan Limited) Rivendell and |
| | Breckland; |
| | (b) (via PPM) Waterfront Leisure; and |
| | (c) (via PPM, Leisureplan and Leisureplan Projects) |
| | Boxwood and Penzance, |
+--------------------+-----------------------------------------------------+
| "D4E" | D4E Mulberry (Holdings) Limited, a company in which |
| | Leisureplan has a 25 per cent. Shareholding |
+--------------------+-----------------------------------------------------+
| "Equitix" | Equitix Leisure Ltd |
+--------------------+-----------------------------------------------------+
| "General | the general meeting of the Company to be convened |
| Meeting" or | for no later than 23 December 2009 to approve the |
| "GM" | Resolution or any amendment to it |
+--------------------+-----------------------------------------------------+
| "Group" | the Company and its subsidiaries |
+--------------------+-----------------------------------------------------+
| "Hendersons" | HPC Nominees Limited |
+--------------------+-----------------------------------------------------+
| "HPFI" | HPFI Finance Sarl |
+--------------------+-----------------------------------------------------+
| "Leisureplan" | Leisureplan Investments Limited, a company in which |
| | the Company (via PPM) has a 50 per cent. |
| | shareholding and which is the parent company of |
| | Leisureplan Projects |
+--------------------+-----------------------------------------------------+
| "Leisureplan | a wholly owned subsidiary of PPM and parent company |
| Limited" | of Rivendell and Breckland |
+--------------------+-----------------------------------------------------+
| "Leisureplan | Leisureplan Projects Limited, a wholly owned |
| Projects" | subsidiary of Leisureplan and the parent company of |
| | Boxwood and Penzance |
+--------------------+-----------------------------------------------------+
| "Listing Rules" | the listing rules of the Financial Services |
| | Authority |
+--------------------+-----------------------------------------------------+
| "Ordinary | the issued ordinary shares of 1p each in the |
| Shares" | capital of the Company |
+--------------------+-----------------------------------------------------+
| "Parkwood | Parkwood Leisure Limited, a wholly owned subsidiary |
| Leisure" | of the Company |
+--------------------+-----------------------------------------------------+
| "Penzance" | Penzance Holdings Limited, a wholly owned |
| | subsidiary of Leisureplan Projects and parent |
| | company of Penzance Leisure |
+--------------------+-----------------------------------------------------+
| "Penzance | Penzance Leisure Limited, a wholly owned subsidiary |
| Leisure" | of Penzance |
+--------------------+-----------------------------------------------------+
| "PFI" | Private Finance Initiative |
+--------------------+-----------------------------------------------------+
| "PPM" | Parkwood Project Management Limited, a wholly owned |
| | subsidiary of the Company |
+--------------------+-----------------------------------------------------+
| "Resolution" | the ordinary resolution to dispose of the Disposal |
| | Interests to be proposed at the General Meeting |
+--------------------+-----------------------------------------------------+
| "Rivendell" | Rivendell Leisure (Holdings) Limited, a wholly |
| | owned subsidiary of Leisureplan Limited and parent |
| | company of Rivendell Leisure Limited |
+--------------------+-----------------------------------------------------+
| "Sale Agreement" | the conditional sale and purchase agreement dated |
| | 19 November 2009 between (1) PPM and Leisureplan |
| | Limited and (2) Equitix, for Equitix to acquire the |
| | Disposal Interests |
+--------------------+-----------------------------------------------------+
| "Shareholders" | the holders from time to time of the Ordinary |
| | Shares |
+--------------------+-----------------------------------------------------+
| "SPC Group" | the Group's special purpose companies sub-group |
| | which includes Rivendell, Breckland, Leisureplan, |
| | Boxwood, Penzance and Waterfront Leisure |
+--------------------+-----------------------------------------------------+
| "SPV(s)" | Special Purpose Vehicle(s) |
+--------------------+-----------------------------------------------------+
| "Waterfront | Waterfront Leisure (Crosby) Limited, a company in |
| Leisure" | which the Company (via PPM) has a 50 per cent. |
| | shareholding |
+--------------------+-----------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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