Gresham is pleased to announce the exchange of contracts for the sale and simultaneous leaseback of its head office at Sopwith House in Southampton ('the Property'), to Pickwick Estates Limited.
The sale of the Property follows a decision taken by the Board in 2008 to increase the group's liquidity by converting illiquid assets to liquid assets. The disposal proceeds will augment Gresham's current cash resources, which prior to this transaction were already ahead of the cash balance of £1.1m at 31 December 2008 announced on 12 January 2009.
The sale of the Property will generate a cash consideration of £875,000, of which £87,500 is payable on exchange and the balance to be paid on completion (anticipated to be in the second quarter of 2009). The carrying value of the freehold property was £860,000 at the date of exchange, which taking into account the costs of the transaction gives rise to no profit or loss on disposal.
At the same time, the Company has entered into an agreement with the purchaser of the Property to lease it back on completion at a market rent for a ten year period, with a 5 year break option.
Eric Sepkes, Chairman, commented: 'The sale announced today follows a strategic decision taken by the Board in summer 2008 to increase the group's liquidity and strengthen its balance sheet as a structured response to the severe economic conditions globally. We believe that strengthening the balance sheet through the sale of non-core assets, at the right price, remains an appropriate strategy given both current economic conditions and the significant opportunities that lie ahead for the group.
Our products and capabilities are uniquely placed to assist our clients, and their customers, to deliver efficiencies, gain new business and manage risks more effectively. The recently announced contract with a global bank is testament to our capability in truly global markets and the freehold sale announced today underlines our focus on delivering those core capabilities for the long term.'