Trafalgar New Homes PLC Director loans (9846P)
September 06 2017 - 6:57AM
UK Regulatory
TIDMTRAF
RNS Number : 9846P
Trafalgar New Homes PLC
06 September 2017
6 September 2017
Trafalgar New Homes plc
(the "Company")
Director loans
Speldhurst loans
Trafalgar New Homes plc (AIM: TRAF), the residential property
developer operating in southeast England, provides further details
on its site in Speldhurst, Tunbridge Wells, Kent (the "Speldhurst
Site"). The Speldhurst Site was acquired with the benefit of
planning permission for the demolition of the existing property and
the erection of a substantial new build detached house on the site,
the building of which is progressing and scheduled for completion
in October 2017.
The Speldhurst Site is held on trust for the benefit of Combe
Bank Homes Limited ("CBH"), a subsidiary of the Company, by Alex
Johnson, a director of the Company. The Speldhurst Site was
acquired by Mr Johnson on 17 June 2016 and a declaration of trust
was entered into on the same date for CBH to be the beneficial
owner of the Speldhurst Site (the "Declaration of Trust"). The
Speldhurst Site was acquired for GBP670,000, plus costs of
purchase, which was funded by a loan of GBP221,000 from Lloyds Bank
in the name of Mr Johnson and the balance was paid by CBH in
cash.
In addition, Lloyds Bank has provided a loan facility of up to a
further GBP614,000 to Mr Johnson for development of the Speldhurst
Site (the "Facility"), of which GBP300,455 has been drawn to date
and made available to CBH by Mr Johnson. The Facility can only be
drawn against quantity surveyor certificates of work carried out on
the site and further drawings under the Facility are expected to be
made in future for the benefit of CBH (up to the available balance
of GBP313,545).
The Lloyds Bank loans are repayable on 31 January 2018 and
attract interest at an annual rate of 5.2% over the official bank
rate of The Bank of England from time to time, which is paid
monthly by CBH. Chris Johnson, the father of Alex Johnson and Chief
Executive of the Company, has provided a personal guarantee to
Lloyds Bank in respect of its loan to Alex Johnson.
As a result of the Declaration of Trust, Mr Johnson has not and
will not receive any benefit or gain from the Speldhurst Site nor
from the Lloyds Bank loan. CBH has accepted responsibility for the
repayment of the loan and interest payments on it on the same terms
as Mr Johnson has with Lloyds Bank. However, the effect of the
arrangement is that Mr Johnson has loaned to CBH GBP551,455 to date
and expects to loan to CBH up to a further GBP283,545 (in line with
the remaining availability under his Lloyds Bank facilities).
The trust and loan arrangements between CBH and Alex Johnson in
respect of the Speldhurst Site are related party transactions under
the AIM Rules for Companies. Accordingly, the directors independent
of the transactions consider, having consulted with Allenby Capital
Limited, the Company's Nominated Adviser, that these arrangements
are fair and reasonable insofar as the Company's shareholders are
concerned.
Working capital loan
On 27 June 2013, CBH entered into a loan agreement with Chris
Johnson, Chief Executive of the Company, for working capital
purposes ("CBH Loan"). Under the terms of the CBH Loan, Mr Johnson
is entitled to receive interest of 5% per annum, payable annually
in arrears. On 6 September 2017, Mr Johnson agreed to waive
interest due on the CBH Loan for the year ended 31 March 2017,
which would have totalled GBP106,096. The CBH Loan will continue to
accrue interest for the year ending 31 March 2018. The outstanding
balance on the CBH Loan, which currently stands at GBP2,188,802,
was repayable by 31 March 2017, but Mr Johnson has today agreed to
extend the repayment date of the CBH Loan until 31 August 2018. CBH
will make repayments on the CBH Loan periodically, depending on its
working capital requirements, and Mr Johnson has confirmed he will
continue to support the Company's working capital requirements as
needed.
The extension of the repayment date and waiver of interest
payments on the CBH Loan is a related party transaction under the
AIM Rules for Companies. Accordingly, the directors independent of
the transaction consider, having consulted with Allenby Capital
Limited, the Company's Nominated Adviser, that the amendments to
the CBH Loan are fair and reasonable insofar as the Company's
shareholders are concerned.
Enquiries:
Trafalgar New Homes plc +44 (0)1732 700
Christopher Johnson 000
Allenby Capital Ltd - Nominated
Adviser and Broker +44 (0)20 3328
Jeremy Porter/James Reeve 5656
Yellow Jersey PR Limited +44 (0)7748 843
Felicity Winkles/Henry Wilkinson 871
This information is provided by RNS
The company news service from the London Stock Exchange
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