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("Cosalt" or the "Company")
Disposal of investment property
Update on the financial position
Cosalt announces that, yesterday, it exchanged contracts for the sale of the freehold title to land off Gibson Lane, Melton, North Ferriby, Hull (the "Property"), following an auction which took place yesterday.
The Property was sold to Reynolds 2000 Limited for £350,000 payable in cash on completion. After taking account of auction costs, the net proceeds receivable by the Cosalt group will be £321,725. Completion is expected to occur on 21 December 2012.
The Property's book value is £1,000,000. After taking account of certain non-recoverable direct costs, the Property produced a net loss to the Group of approximately £10,000 for the year to 30 September 2012.
The Property is an investment property only, and none of the Cosalt businesses use it for their operations. Other than the receipt of the proceeds and the small reduction in on-going losses, there will be no other effects on the Company as a result of this sale.
Proceeds of the sale of the Property
The Company has certain bank and other loans falling due on 31 December 2012. The purpose of the sale of the Property is to generate cash which will be used to reduce the Company's indebtedness. The proceeds of the sale of the Property will be applied in accordance with a deed of priority entered into between, among others, Cosalt, the Company's lenders, the Cosalt Pension Scheme trustees and David Ross. The sale proceeds will partially discharge the Company's obligation to repay the balance of a £1.5 million unsecured loan previously advanced by David Ross against the sale of the Property and certain other properties owned by the Company and which was announced by Cosalt on 3 May 2011.
Cosalt Plc Tel: +44 (0) 1472 725 560
Trevor Sands, Chief Executive Officer
Cardew Group Tel: +44 (0) 207 930 0777
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