31st Jan 2014 16:38
LONDON (Alliance News) - Norcros PLC Friday said its conditional contract to sell part of its surplus freehold land to WM Morrison Supermarkets PLC is unlikely to go through after a quarrel about its planning consent.
The branded shower supplier said Morrisons has been refusing to proceed in line with the contract, which had been agreed on the condition of obtaining "acceptable" planning consent for the site.
Norcros said it is now "unlikely" that Morrisons will proceed in line with the contract.
"The board and its legal advisers believe the planning consent to be acceptable, and is considering its next actions regarding the contract, including seeking compensation from Morrisons," Norcros said in a statement.
A Morrisons spokesperson said, "The planning consent granted in 2013 did not meet our contractual requirements which we have discussed with Norcros. Regrettably we have reached a point where agreement is not achievable and this is now a legal matter."
Under the terms of the August 2011 deal, the land would have been sold for GBP8.25 million, conditional on obtaining planning consent for the site. Norcros said it estimated the land required about GBP5.7 million of infrastructure developments, meaning the expected net proceeds would be about GBP2.6 million.
Norcros said planning consent was obtained on the Highgate site, Tunstall, in May 2013 for a 71,000 square feet foodstore for Morrisons and associated non-food retail units.
Norcros said it will consider the carrying value of the surplus land in question and report on this at its preliminary results announcement in June 2014. It said there is no change to its forward guidance for underlying earnings or net debt as a result of the Morrisons update.
Norcros shares were Friday quoted at 22.25 pence, down 0.50 pence, or 2.2%, while Morrisons was down 0.3% at 239.95 pence.
By Samuel Agini; [email protected]; @samuelagini
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
MRW.LNorcros