Business
Purchase of property, posting
Purchase of property, posting.
About this update from Mti Wireless Edge Ltd
[{"type":"text","content":"\n RNS Number : 6801U MTI Wireless Edge Limited 20 October 2010 \n \n\n20 October 2010\n\nMTI Wireless Edge Ltd \n(\"MTI Wireless\" or the \"Company\")\n \nPurchase of property, posting of circular and notice of EGM\n \nMTI Wireless, a market leader in the manufacture of flat panel antennas for fixed wireless broadband, is pleased to announce that it has reached agreement in principle with its largest shareholder, MTI Computers & Software Services (1982) Ltd. (\"MTI Computers\"), to acquire the leasehold interest of its head office located at 11 Hamelacha St., Afek Industrial Park, Rosh-Ha'Ayin, 48091, Israel (the \"Property\").\n \nBackground to the transaction\n \nThe Company currently occupies approximately 75 per cent. of the Property, pursuant to the terms of a lease agreement entered into between the Company and MTI Computers on 7 March 2006. The Company was recently informed that MTI Computers had taken a decision to sell the Property and, as the largest tenant at the Property, MTI Computers offered the Company the opportunity to purchase the Property from it before it would otherwise be sold on the open market.\n \nThe purchase price to be paid by the Company is NIS 18,800,000 (approximately US$ 5.2 Million) plus 5 per cent. purchase tax (the \"Purchase Price\"), and this has been calculated on the basis an independent valuation report dated 26 September 2010 prepared by Haushner & Co (the \"Appraisal Report\"). Based on the Appraisal Report, at the purchase price above, and including expenses, the Director's believe that the valuation yield to the Company on the total purchase cost of the Property is approximately 9% per annum at current rental levels. \n \nThe Company intends to fund approximately US$ 2.9 million of the Purchase Price from its existing cash resources, which as at 30 June 2010 amounted to US$ 12.3 million. The remainder of the Consideration, together with any applicable taxes (approximately US$2.5 million in aggregate) will be financed via a bank loan secured on the Property.\n \nFollowing the purchase of the Property, the Directors anticipate that the Company's operating costs will be reduced by approximately US$ 300,000 on annual basis (based on the Company's anticipated operating costs as at 31 December 2010) by virtue of the fact that it w...