Urban Exposure plc (UEX)
2 January 2020
THIS ANNOUCEMENT INCLUDES INSIDE INFORMATION
Urban Exposure Plc
("Urban Exposure" or the "Company")
Related Party Transaction
The Company announces that it will pay £400,000 to Jones Lang LaSalle Corporate Finance Limited ("JLL") in respect of a historic introduction arrangement.
In 2016, an agreement was entered into between JLL and the entities which conducted the Urban Exposure business prior to the Company's launch in 2018 (the "Legacy UE Companies") pursuant to which JLL agreed to introduce the Legacy UE Companies to potential funding partners in return for introduction fees should any funding be provided to the Legacy UE Companies or their related parties (the "JLL Agreement").
Following the Company's launch and its acquisition of the Urban Exposure business, the UE Legacy Companies ceased operations and are now in the process of being wound down.
In July 2018, subsidiaries of the Company entered into a joint venture with KKR for the financing of mainstream housing developments throughout the UK with an initial size of £165 million. Following announcement of this joint venture, JLL claimed against the UE Legacy Companies for the payment of introduction fees under the JLL Agreement.
JLL has agreed to settle its claim for £400,000, which the Company has agreed to pay to draw the matter to a close. Although the Company is not a party to the JLL Agreement, the Board believes that the benefit to the Company of concluding this matter and not being drawn into any contentious proceedings justifies payment by the Company of the settlement amount. The cost of the £400k should be seen in the context of the KKR joint venture, which will generate material earnings over the five-year life of the venture.
As the Legacy UE Companies are entities ultimately controlled by two of the executive directors (and their families), Randeesh Sandhu and Ravi Takhar, the payment of the settlement amount is deemed to be a related party transaction for the purposes of AIM Rule 13. Non-executive chairman William McKee also holds a small stake in one of the Legacy UE Companies and therefore is not being treated as independent in relation to AIM Rule 13.
The independent directors of the Company, being the directors other than Randeesh Sandhu, Ravi Takhar and William McKee, having consulted with the Company's nominated adviser, Liberum Capital Limited, consider that payment of the settlement amount is fair and reasonable insofar as the Company's shareholders are concerned.
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|EQS News ID:||945817|
|End of Announcement||EQS News Service|