Housebuilder plans to reinvest cash from sale into London and the South-east
Housebuilder Redrow has sold its Scottish division to Springfield Properties for £49m.
Springfield will pay £5m cash up front for the business and a deferred cash consideration of £44m – to be paid as developments are sold over the next three years.
Redrow will use the cash from the disposal to increase investment in land in London and the South-east.
Redrow’s operation in Scotland consists of eight sites with planning permission. The net book value of its assets there – which are the subject of the transaction – amount to £49m.
In the year ended 30 June 2010, Redrow’s operation in Scotland generated turnover of £31m and a loss before tax of £1.7m.
Steve Morgan, chairman of Redrow, said:
“The board is pleased to have secured a buyer for our operation in Scotland following a competitive process that we outlined in our April statement.
“Springfield is a successful Scottish housebuilder and the transaction will substantially increase its presence in the Central Belt.
“The transaction will also provide our customers and employees with a good home for the future, whilst enabling Redrow to increase its investment in land in London and the South East.”