FORMATION GROUP
PLC
('Formation' or the 'Company')
Investment in
Proton Partners International Limited
On 28 February 2017, Formation
announced a profit share agreement with London (North) Properties Limited (“LNPL”) and
Pinnacle Developments Limited in relation to a development property
at 34 Wembley Hill Road, Wembley (“Profit Share Agreement”). As
part of this Profit Share Agreement, the Company advanced a loan of
£5 million as finance for the development.
On 5 November 2017, LNPL agreed to
sell its interest in 34 Wembley Hill Road to Peabody Enterprises
Limited (“Peabody”) (the “Sale Agreement”) and thereafter to
construct and deliver 198 finished apartments to Peabody. LNPL will
also retain two commercial units on 250-year leases as part of this
agreement and these will constitute part of LNPL’s profit. Peabody
are obliged to provide agreed levels of funding towards the
development process of this site.
Sufficient deposits under the Sale Agreement have now been
released to LNPL to enable it to repay its bank borrowings and the
£5 million loan to the Company. Formation continues to retain its
entitlement to a 40% share of the profits generated on this
development as part of the Profit Share Agreement.
Formation announces that on 6 March
2018 the Company used the £5 million returned under the
Profit Share Agreement to acquire 4,347,826 ordinary shares in
Proton Partners International Limited (“PPI”), equivalent to 3.44%
of PPI’s issued share capital. Following this investment, Formation
has the right to appoint a director to the Board of PPI.
PPI is a private company (www.Proton-int.com), founded in
February 2015, which is presently
leading the way for Proton Beam Therapy in the UK, with one
operational centre in South Wales
and further centres nearing completion in both North East England
and the Thames Valley. A Proton treatment unit is also scheduled to
be operational in Abu Dhabi by
2019. It is anticipated that these and further centres to be
developed will become hubs of excellence for advanced cancer
treatment.
To address the growing worldwide demand for more specialised
cancer care, PPI plans to develop and operate a network of Proton
Beam Therapy Cancer Centres, in the UK and international markets,
so that cancer patients can receive the best possible care without
needing to raise large amounts of money to obtain Proton Beam
Therapy abroad.
The Directors believe that PPI has large growth potential in an
undersupplied market, as the NHS and health insurance companies
increasingly recognise the importance of Proton Beam Therapy in the
treatment of cancer and are prepared to fund such treatments for
their patients.
Since its inception in 2015, PPI has demonstrated its ability to
operate effectively in a specialised market place, having
successfully acquired land and built treatment centres. The
Directors believe that PPI’s expansion to date has been planned and
delivered in an organised and efficient manner by a professional
management team and operating structure, utilising the company’s
own cash resources and only very limited bank borrowing. They
further believe that Formation’s investment in PPI diversifies the
focus of the Company’s business, into a relatively low risk sector,
with the potential for rapid and profitable growth.
The directors of the Company accept responsibility for the
contents of this announcement.
--ENDS--
Enquiries:
Formation Group
plc
David Kennedy, Chief Executive Officer |
Tel: +44 (0) 20 7920
7590 |
Peterhouse Corporate Finance
Limited (Corporate Adviser)
Fungai Ndoro and Mark Anwyl |
Tel: +44 (0) 20 7469
0930 |