Keller Group plc Acquisition from GJ3 Limited and GJ4 Limited
Keller announces that it has acquired the freehold of a processing and warehousing facility at Avonmouth, near Bristol, for £62m from GJ3 Limited and GJ4 Limited, pursuant to a settlement agreement in connection with the previously announced contract dispute arising on a project completed in 2008.
As set out in Keller’s Annual Report & Accounts, the Group’s final liability from this dispute is in part dependent on the value of the property after some remedial works. In order to maximize this value, the Board has decided to acquire the property now with a view to marketing it to third parties imminently, and the intention of completing a sale before the end of 2016.
The facility is fully operational, has a tenant on a long term lease and the acquisition price represents an annual rental yield of 6.8%. Keller expects to recoup most, if not all, of the purchase price on sale. Management is confident that the existing provision in respect of this settlement will prove more than adequate.
This purchase has been largely financed by a new bank facility raised for this purpose and will have no impact on the Group’s trading or on the implementation of its strategic objectives.
The Group will update the market on trading at the time of its Annual General Meeting on 24 May 2016.