Luxury apparel retail company Ted Baker announced that it has exchanged contracts with a wholly owned subsidiary of British Airways Pension Trustees Limited in respect of the sale of the entire issued share capital of Big Lobster Limited.
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Big Lobster is a wholly owned subsidiary of Ted Baker, which owns, as its sole asset, Ted Baker’s registered and head office, The Ugly Brown Building, which Big Lobster currently leases to the rest of the group.
Rachel Osborne, Acting CEO, said: “The sale and leaseback of the Ugly Brown Building and future relocation of our head office are significant developments resulting from the broad asset review we have undertaken in recent months. This transaction and the agreed additional financing provides further headroom and flexibility, which will support the delivery of our transformation strategy.”
The consideration for the sale is £78.75 million and will be paid in cash on completion, which is expected to take place in June 2020.
In connection with the sale, Ted Baker has entered into a short term lease of the property for a period following completion, and at completion will enter into an option with the purchaser to take a long-term lease of part of the adjacent newly developed property, to be known as Bowline, Tribeca, St Pancras Way.
The consideration of £78.75 million represents a premium of approximately 39.1% to the last published book value of the property as at 26th January 2019 of £56.6 million.
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Ted Baker also announced that its lending bank syndicate continues to be supportive and has agreed to increase the headroom under the group’s facilities by £13.5 million until 18 December 2020. The availability of this additional funding provides further financial flexibility while the group implements its transformation programme.