FORMATION GROUP
PLC
(“Formation” or the “Company”)
Profit Share
Agreement
Formation is pleased to announce that it has entered into a
profit share agreement with London
(North) Properties Limited (“London (North)”) and Pinacle
Developments Limited (“Pinacle”) in relation to a development
property at 34 Wembley Hill Road, Wembley (“Profit Share
Agreement”).
The property has been granted planning approval to develop 89
apartments and associated car parking. The property also has an
alternative planning approval for a 21 storey building containing
198 apartments, with car parking, communal and private amenity
space, public realm improvements, landscaping and other associated
works.
Under the terms of the Profit Share Agreement, Formation has
advanced a loan of £5 million to London (North), to continue to allow
London (North) to work on the
development which commenced in February 2017. The loan
attracts no interest but instead entitles Formation to 40 per cent.
of the net profit arising on the development (i.e. the profit
generated from sales of units after the repayment of debt utilised
to purchase the site, the cost of development, taxation and
repayment of the loan advanced by the Company). Payment of
funds in relation to the Profit Share Agreement will be made to
Formation once all of the units within the development have been
sold.
David Kennedy and Patrick Kennedy, Chief Executive and
Non-executive Director of Formation respectively, are also
directors of both London (North)
and Pinacle and therefore the agreement is considered to be a
transaction with a related party under the NEX Exchange Growth
Market Rules for Issuers. The Independent Directors of the
Company consider that the terms of the transaction are fair and
reasonable insofar as shareholders are concerned.
The Directors of the Company accept responsibility for the
contents of this announcement.
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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 |
Formation Group Plc (NEX: FRM), headquartered in East London, is an NEX Exchange Growth Market
traded Company focused on property development and project
management services for medium and large scale building projects in
London and the City periphery.
The Company’s portfolio includes both new build and conversion
projects, and is also diversified through a limited exposure to
commercial work and the rental sector.
The management team combines significant Plc experience with
property expertise. The Company is well positioned to exploit a
buoyant London residential
property market, and believes that the newly added property
development division will form a substantial part of its
profitability in the future.