Ask sold Abito for £1.4m
NORTH West property developer Ask sold its residential development company Abito for just £1.4m, after group turnover fell more than 80% in the previous financial year.
In March 2010, Infinity Asset Management’s property fund and Spanish developer Levitt paid just £1.4m for Abito, which has property assets of around £20m, latest Ask accounts reveal.
Infinity’s Les Lang launched Abito in 2004 within the Ask Development Group, to create compact living spaces in urban areas for first-time buyers, young professionals and key workers.
The sale signals Ask’s move away from the direct residential development sector.
The group said it had reinforced its policy of investing primarily in projects that are de-risked through a combination of well secured pre-lets and forward sales and cited partnership schemes in Urmston and Bury town centres and at its Central Park project in East Manchester as examples.
It added: “Advancing there projects, which collectively represents the group progressively delivering in excess of 500,000 sq ft of floorspace with a largely secured end value of £110m will facilitate the recovery of significant equity capital back into the business by way of historic cost recovery and development profits.”
Ask, which employs 36 staff, saw turnover fall 81% to £11.6m for the year to the end of March 2009 (2008: £60.4m).
Its operating loss fell to £8.8m from a profit of £11.3m a year earlier, while pre-tax loss improved slightly to £15m (2008: £17m).
In October 2009, since the year end, the company underwent a management buyout and was acquired by Ask Developments Group Ltd.
Notes to the accounts show the MBO meant £13m of loans and £2.2m of accrued interest to former shareholder Morgan Stanley Real Estate, were settled.
It also renegotiated its rolling credit facility and secured an extra £12.75m of funding.
At the portfolio level a series of project specific facilities totalling £92m was also successfully negotiated and extended simultaneously, which the group said would underpin its capacity to successfully deliver its business plan.
The directors’ report said: “The group remained steadfastly focussed on securing both the short and medium term debt finance required to support both the group and its development portfolio with remarkable results in the most challenging bank climate ever experienced in the group’s history.
“At the corporate level, the refinancing strategy reported in last year’s accounts was successfully concluded after the year end in October 2009, with the effect that the capital necessary to underpin delivery of the group’s revised business plan has been fully secured.
