Ground Rents Income Fund PLC Disposal of Beetham Tower (3153H)
03 August 2021 - 4:00PM
UK Regulatory
TIDMGRIO
RNS Number : 3153H
Ground Rents Income Fund PLC
03 August 2021
DISPOSAL OF BEETHAM TOWER
Ground Rents Income Fund plc ("GRIO" or the "Company") announces
that it has sold its wholly-owned subsidiary, which owns the
freehold interest in Beetham Tower in Manchester (the "Property"),
to a private investor for nominal consideration. The disposal
releases GRIO and its subsidiaries from all current litigation and
freeholder obligations relating to the Property that was originally
acquired in 2012.
In 2014, a building defect was identified and, in January 2019,
the High Court passed a judgement requiring the freeholder, a
wholly-owned GRIO subsidiary to perform the repair. The repair
obligation defaulted to the freeholder following the collapse of
the original contractor, Carillion Construction Limited, who would
otherwise have likely been legally responsible for funding the
repair.
Resolving the complex repair issues and related litigation at
the Property has been a strategic priority for the GRIO Board of
Directors and Schroders since the latter's appointment as
alternative investment fund manager (the "Manager") in May 2019.
This has involved regular consultation with the building residents
and other stakeholders. Following extensive negotiations, the buyer
is expected to deliver a long-term repair solution for the
Property.
The disposal has the following financial impact with reference
to the unaudited interim results to 31 March 2021, released on 29
July:
-- Reversal of the specific GBP2.9 million provision which
reflected an estimate of the cost the asset owning subsidiary would
have incurred, were it to have proceeded with the remedial works
required to repair the Property, after recovery from third parties;
and
-- Increase in costs and expenses specifically relating to the
Property incurred since 1 April 2021 of approximately GBP300,000.
Schroders has not charged additional fees for work carried out in
connection with resolving the Beetham Tower litigation.
The Property has been a very challenging investment for the
Company but completion of the disposal is a positive step forward.
As set out in the interim results, the GRIO Board of Directors and
the Manager remain highly focused on delivering value for
shareholders.
For further information:
Schroder Real Estate Investment Management Limited
Matthew Riley 020 7658 6000
Singer Capital Markets (Broker)
James Maxwell / Kailey Aliyar 020 7496 3000
Appleby Securities (Channel Islands) Limited (Sponsor)
Andrew Weaver 01534 888 777
FTI Consulting
Dido Laurimore / Richard Gotla 020 3727 1000
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END
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