Hargreaves Services PLC Disposal of Brockwell Energy Limited (2056D)

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RNS Number : 2056D

Hargreaves Services PLC

08 October 2018

8 October 2018

Hargreaves Services plc

(the "Hargreaves" or the "Group")

Disposal of Brockwell Energy Limited ("Brockwell")

Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the industrial and property sectors, is pleased to announce the signing of a conditional agreement for the sale of the entire share capital of Brockwell Energy Limited to Lantern Bidco Limited, a newly incorporated company backed by international investors experienced in UK energy infrastructure.

Brockwell is the holding company for the Group's interests in the renewable energy sector which the Board has previously announced its intention to sell. The initial gross proceeds, which are payable in cash at completion, are estimated to be GBP21m including the reimbursement of certain costs to be incurred by Brockwell prior to completion. A further GBP2m in cash may become payable, contingent upon the successful financial close of a future development project.

Completion will take place no later than 19 October 2018, but the purchaser has the right to withdraw from the contract up to that time at its sole discretion.

Brockwell has not recorded any income to date and was reported as a discontinued business in the audited results of Hargreaves for the year ended 31 May 2018, recording a loss before and after tax of GBP1m. The net assets of Brockwell at completion are estimated to be GBP10m. After deduction of transaction fees and other non-recoverable costs, the Board estimates that Hargreaves will record a profit on disposal of Brockwell of approximately GBP4m excluding the contingent consideration. The Board intends to use the cash received to reduce bank borrowings.

Hargreaves will retain certain freehold land assets on which Brockwell intends to develop renewable energy assets in the future and as a result the Group will continue to have a landlord/tenant relationship with Brockwell on arm's length terms.

Roger McDowell, the Chairman of Hargreaves, said: "The Board is pleased to have exchanged contracts for the sale of Brockwell to a partner who we believe has demonstrated its commitment to the successful development of Brockwell's renewable energy asset portfolio."

For further details:

 
 Hargreaves Services plc 
  Gordon Banham, Chief Executive Officer 
  John Samuel, Group Finance Director       0191 373 4485 
 Buchanan (Financial PR) 
  Mark Court/Sophie Wills/Henry Wilson      0207 466 5000 
 N+1 Singer (Nomad and Joint Corporate 
  Broker) 
  Sandy Fraser/Rachel Hayes                 0207 496 3000 
 Investec (Joint Corporate Broker) 0207 597 4000 
  Sara Hale/Helene Comitis 
 

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October 08, 2018 02:00 ET (06:00 GMT)