Business
Formation of Sovereign Revers
Formation of Sovereign Revers.
About this update from Grainger Plc
[{"type":"text","content":"\n RNS Number : 4401R Grainger PLC 23 August 2010 \n \n\n \n \n \n \n23 August 2010 \n \nGrainger plc ('Grainger'/ the 'Company'/ the 'Group')\n \nGrainger and Moorfield announce formation of \nSovereign Reversions Equity Release Joint Venture \n \n \nFurther to its announcement on 17 June 2010 and the completion of the acquisition of Sovereign Reversions plc ('Sovereign Reversions') on 9 August 2010 (the 'Acquisition'), Grainger plc, the UK's largest listed specialist residential property owner and manager, today announces that Grainger Equity Release Limited ('GERL') has entered into a 50:50 joint venture (the 'Joint Venture') for Sovereign Reversions with MREF II Equity Release Limited a wholly owned subsidiary of Moorfield Real Estate Fund II ('Moorfield'), subject only to obtaining necessary regulatory approvals (the 'Approvals'). The Sovereign Reversions business specialises in equity release investment, advice, plan provision and plan administration. The Sovereign Reversions property portfolio was valued at approximately £69 million as at 30 April 2010.\n \nThe joint venture will be managed by a board with GERL and Moorfield having equal board control, notwithstanding the number of directors appointed by each party. Grainger Equity Release Management Limited will manage the assets on behalf of the Joint Venture, for which it will receive an annual management fee based on the prevailing Gross Asset Value which will lead to the transaction being earnings enhancing for Grainger. The transaction is expected to be NAV neutral for Grainger. \n \nThe Sovereign Reversions business will continue to operate as normal throughout the integration process following the Acquisition and the creation of the joint venture. Both Grainger and Moorfield are firmly committed to the equity release sector and increasing the value of the existing portfolio of assets and, in time, will look into the possibility of acquiring further assets. \n \nFollowing receipt of the Approvals, GERL will receive a cash consideration of £17.5 million from Moorfield for a 50% stake, representing 50% of the acquisition consideration paid by GERL for Sovereign Reversions. In addition, Moorfield will contribute an additional sum to GERL to cover 50% of the associated acquisitio...