Stobart raises £61m through Widnes site sale

NORTH West transport group Stobart is to raise up to £62.5m through the sale of a major property asset.

The company said the site of a new 528,000 sq ft Northern distribution hub for Tesco’s fresh operations in Widnes is the “key element” of the disposal opf part of its inland ports asset.

The asset is being bought by Legal & General Assurance (Pensions Management) Limited, for £61m rising to £62.5m on the satisfaction of further conditions. Stobart is also selling and leasing back its entire inland ports terminal at Widnes. 

Andrew Tinkler, chief executive of Stobart Group, said:  “This asset disposal illustrates a fundamental strategy of our group which is to invest in assets in order to develop existing and new customer relationships and then realise the value of the asset, at a profit, to reinvest elsewhere in the business.

“At Widnes this has enabled us to gain a long-term distribution contract for Tesco and to increase the utilisation and support development of the next phases of the inland port facility.

“The proceeds from this asset sale, will allow the group flexibility in securing the optimum debt structure for future asset developments, including the expansion programme at London Southend Airport.”

The sale will generate an initial return on investment in the region of 20% with the potential for further returns.

The £61m is satisfied by a cash payment of which the majority will be used to repay existing borrowings with RBS and Barclays, significantly reducing the core debt in the balance sheet of the company to around £45m. 

As well as the sale of the fresh produce distribution centre, the Stobart Ports division has entered into a 25 year sale and leaseback arrangement on its inland port terminal.

After this, the group expects to develop further phases on the remaining 95 acres of the inland port in response to customer demand.