TIDMTHAL
RNS Number : 9419U
Thalassa Holdings Limited
22 October 2014
22 October 2014
Thalassa Holdings Ltd
(Reuters: THAL.L, Bloomberg: THAL: LN)
("Thalassa" or the "Company")
Further Statement re: Relocation of UK Operations
Thalassa, an international holding company with interests in
marine geophysical services and autonomous robotics, is making a
statement following the recent inaccurate press coverage (the
"Coverage") made without recourse to the Company or its advisers
regarding the lease entered into by the Company with Eastleigh
Court Limited ("ECL") for 10,000 sq ft of office space at Eastleigh
Court on 3 October 2014 (the "Lease" and the "Property").
The Lease was entered into in order to move the Company's
principal UK operations from Bude in Cornwall to an area closer to
London and Heathrow and Gatwick airports, which the Independent
Directors (i.e. the Board excluding Duncan Soukup by reason of his
interest in ECL) believe is crucial to attracting specialist and
highly skilled personnel and to running an international
business.
As ECL is owned by Mr Soukup, Thalassa's Executive Chairman, the
Company announced that it had entered into this agreement and
reported on it accordingly as a related party transaction on 3
October 2014.
Given that terms had not been agreed by the Company with ECL in
relation to leasing the office space at the Property, the Company
had no obligation to make any announcement in relation to the Lease
in the July Trading Update; it would have been misleading to do so
until the terms of the same were settled. The Lease had also not
been entered into at the time of the Interim Results Announcement
and was therefore not capable of being disclosed at that time.
The terms of the Lease, as previously stated, are for a rental
at GBP12 psf for a period of 10 years commencing 1 October 2014 to
demonstrate to its employees the Company's long term commitment to
the Property. The Independent Directors would emphasise that the
overriding factor in the Company's decision to rent the Property
from ECL was that, in their opinion, it presented the best value
for money for the Company and its Shareholders, having considered
the options and potential means of financing a new premises
available to the Company at the time. Yield was also discussed and
the Independent Directors concluded that it was impossible to
accurately calculate yield, as the maintenance and full renovation
costs, which ECL is responsible for, will not be known until
building works have been concluded.
Notwithstanding this, the Independent Directors wanted to make a
"best estimate" of the yield and to do so used the actual cost of
purchasing the Property of GBP1,425,000, 4% stamp duty of GBP57,000
and legal fees of GBP7,500, a total up front cost of GBP1,489,500.
The initial estimate of renovation costs as submitted by ECL's
architect amount to GBP230,000, making the aggregate up front and
renovation costs GBP1,719,500 and giving ECL a theoretical yield of
6.98% before taking into account the additional costs of
maintenance, service and operation of the Property, all of which
are ECL's responsibility.
Eastleigh Court is a 13,000 sq ft property on a 15 acre campus,
which includes Eastleigh Court and Eastleigh Stables, and the
opportunity to expand, if needed, at some point in the future
formed part of the Board's decision making process when considering
the Lease. This information has not been included in any previous
disclosure, as the Company has no current need for the space and
because rent would be negotiable at the appropriate time, but not
to exceed GBP12 psf.
There are no other service charges or other ancillary costs
attached to the Lease payable to ECL. The rates payable are
estimated at ca. GBP2-4 psf, subject to further discussion with the
Council.
When the Independent Directors reviewed other properties in the
region that could have met their criteria as to size and length of
lease, they established that all of the other office premises
reviewed were at a cost premium to Eastleigh Court. The Independent
Directors' review was further underpinned by the understanding that
GBP12 psf was an achievable market rent for the Property. This
opinion was supported by documentary evidence of 37, mainly rural,
properties in the greater Wessex area. Of the 37, only 7 properties
were large enough to accommodate the Company's current needs.
However, not all of these would have been able to accommodate
future growth. The rents ranged from GBP12.50 psf to GBP18.50 psf.
All of the properties had added service charges ranging from
GBP0.28 to GBP5.80 psf (or did not quote) and most did not quote
rates.
At a Board meeting held on 9 October 2014, convened to vote on
whether the Company would like to purchase the Property from ECL at
cost, the Independent Directors resolved that it was not in the
Company's best interests to buy the Property, concluding both that
the Company is not a property investment company and that its
resources are best concentrated on its operating businesses.
The Company wishes to make clear that the Board took appropriate
professional advice in connection with the Lease and the Property.
As the Coverage acknowledges, in considering the Lease, the
Independent Directors consulted the Company's AIM Nominated Adviser
in accordance with the terms of the AIM Rules.
The Board would also like to confirm that ECL has offered the
Company the use of Eastleigh Stables, a 5 bedroom house next door
to the Property, as overnight accommodation on an as-and-when
needed basis at GBP100 per room per night and at no additional cost
for recreational/sporting use.
Eastleigh Stables is owned by Eastleigh Stables Ltd, a company
owned by Mr Soukup, and was acquired for GBP1.25 million plus 5%
stamp duty of GBP62,500. The combined purchase price of both
properties was GBP2,802,000 plus the initial renovation costs of
GBP230,000; therefore a total cost to Mr Soukup of
GBP3,032,000.
The Independent Directors remain of the opinion that this
transaction is in the best interests of the Company and its
shareholders.
It is the Board's policy to engage in open and transparent
communications with shareholders and to this end the Company will
continue to keep shareholders updated on all material developments
in a timely way. The Board has updated the market and kept
shareholders informed of developments with regard to its premises
relocation as soon as possible and in accordance with its
obligations under the AIM Rules.
Ends
Enquiries:
Thalassa Holdings Limited
Graham Cole, Non-Executive Director +44 (0) 7775 643545
WH Ireland Limited (Nominated Adviser)
Chris Fielding, Head of Corporate Finance +44 (0) 207 220 1650
Square1 Consulting (Public Relations)
David Bick/Mark Longson +44 (0) 207 929 5599
This information is provided by RNS
The company news service from the London Stock Exchange
END
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