Carillion sells Ask Real Estate for £14m

31 October 2017 08:40 Comments (0)

The troubled contractor has sold its 66.67% stake in Ask Real Estate, and its 50% interest in Ask Carillion Developments to Dukehill, which is run by the Richardson family property business, for a cash consideration of £13.8m.

Around £1m of the cash consideration is contingent on the sale of 100 Embankment, the office due to be built next to the recently completed 101 Embankment at Greengate, Salford. 101 is fully let to insurance firm Swinton on a 10-year lease. Salford City Council is forward-funding the construction of 100.

Ask’s major projects include the £300m Found Space development, a two-tower mixed-used project on the former Bauer Millett showroom in Manchester city centre. The company developed First Street before selling the scheme to Patrizia. In Cheshire, Ask is the development partner for a retail and leisure scheme in Macclesfield.

Carillion said the disposal of its interest in Ask would generate “a modest profit”. The contractor first acquired its stake in Ask in January 2016, having bought out founding shareholders Andy Dodd, Ken Knott, Simon Bate, and Simply Red singer Mick Hucknall. Ask was bought for an undisclosed sum.

Ask Real Estate managing director John Hughes and finance director Jonathan Cross will continue to head up the Ask board following the Richardson family’s purchase of the business.

Hughes said: “Richardson’s investment into Ask Real Estate is a huge vote of confidence in the business putting us in a strong position to continue to grow our mixed-use portfolio, and deliver our business plan.”

Commenting, Keith Cochrane, interim chief executive, said: “We are pleased to be able to announce further progress. Much remains to be done, and we are continuing to execute our plans to refocus the business, reduce cost and strengthen our balance sheet.”

The disposal is Carillion’s second major deal this month, after the firm sold its healthcare facilities management business to Serco for £64m.

The contractor is aiming for £300m of disposals to help reduce debt, after it was hit by a £845m profit warning this summer.

Birmingham-based Richardson has previously been an active developer in Manchester, having built out the Printworks. Richardson was built up over 50 years by brothers Don and Roy Richardson, and is now run by their respective children.

The company has previously developed shopping centres in partnership with Carillion, and over the past few years expanded into central Europe.