Town Centre Securities PLC Agreement reached to re-finance Merrion House (4255V)
July 23 2018 - 3:36AM
UK Regulatory
TIDMTOWN
RNS Number : 4255V
Town Centre Securities PLC
23 July 2018
23 July 2018
The following amendment has been made to the 'Agreement reached
to re-finance Merrion House, Leeds' announcement released on 23
July at 7am under RNS No 3600V.
The following sentence has been amended: "As a result, TCS will
receive GBP26.4 million in cash on 2nd July 2018."
The sentence now reads: "As a result, TCS will receive GBP26.4
million in cash on the 24th July 2018."
All other details remain unchanged.
The full amended text is shown below.
Town Centre Securities PLC
(The 'Group' or the 'Company')
Agreement reached to re-finance Merrion House, Leeds
Further to the earlier announcement on 6 July 2018, Town Centre
Securities (TCS), the Leeds based property investor and car park
operator, is pleased to announce that it has finalised discussions
with Leeds City Council (LCC) in relation to a re-financing of
Merrion House in Leeds.
On 6(th) February 2018, the Company announced practical
completion of its Merrion House redevelopment. The 170,000 sq ft,
ten-storey building is jointly owned by TCS and LCC, with LCC
occupying the building on a new 25-year lease.
Merrion House is jointly and equally owned by TCS and LCC in
Merrion House Limited Liability Partnership (MH LLP). MH LLP has
reached agreement for LCC to advance all base rent due from 1(st)
October 2018 until the lease end on 11(th) February 2043,
discounted at an annual equivalent rate of 3.5% plus costs.
As a result, TCS will receive GBP26.4 million in cash on the
24(th) July 2018. This is net of estimated costs. From an
accounting perspective this transaction will be treated as a
financing arrangement within MH LLP. On that basis MH LLP will
continue to recognise quarterly rent (GBP0.8 million per quarter)
offset by an interest charge calculated on an effective interest
rate basis. TCS 50% share of the accounting net income will
continue to be recognised in its income statement.
The balance sheet of the LLP will reflect the full market value
of the building, less the deferred income balance, which will
reduce quarterly to zero at the lease end. Half of the net asset
value of the entity is then consolidated into TCS.
The lease allows for capped RPI increases every five years.
These will continue to apply and will flow as normal rental
payments through MH LLP.
Edward Ziff, Chairman and Chief Executive, said:
"We're delighted to announce this agreement with Leeds City
Council which gives us both enhanced financial flexibility to fund
our ambitious growth plans and an immediate benefit to our leverage
ratios.
"The innovative transaction allows us to maintain joint
ownership of Merrion House and benefit from future rental
increases, whilst giving the Company a material cash injection. The
proceeds will be used to immediately reduce debt, whilst giving
more flexibility to invest in our acquisition and development
pipeline for future growth, including the recently announced George
Street development in Leeds.
"This agreement adds to our growing momentum and follows our
recent announcement of the GBP9 million purchase of Ducie House in
Manchester, which is a valuable addition to our existing assets at
the Piccadilly Basin site and strengthens our wider portfolio of
opportunities."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation.
LEI Number: 213800XRCH9RW2RIZD79
ENDS
For further information, please contact:
Town Centre Securities PLC www.tcs-plc.co.uk / @TCS PLC
Edward Ziff, Chairman and Chief Executive 0113 222 1234
Mark Dilley, Group Finance Director
MHP Communications 0203 128 8742
Reg Hoare / Alistair de Kare- Silver tcs@mhpc.com
Notes to Editors:
Town Centre Securities PLC (TCS) is a Leeds based property
investor and car park operator with assets of approximately
GBP385m. With more than 50 years' experience, a commitment to
sustainable development and a reputation for quality and
innovation, TCS creates mixed use developments close to transport
hubs in major cities across the UK. Its current portfolio delivers
an annual income of more than GBP26m.
For more information visit www.tcs-plc.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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