- Silk Logistics (SLH) novates the land purchase contract for the 11-hectare greenfield site in Kemps Creek, NSW to ESR Australia
- The novation follows after the companies entered into an agreement on November 4, 2021 for cash consideration of $58 million, achieving Silk’s strategic objective
- As part of the novation, Silk has entered into an agreement for lease with ESR under which it may enter into a 10-year lease for purpose-built warehouses on Kemps Creek
- Silk will receive an up-front cash amount of $13.55 million which includes reimbursement and stamp duty
- SLH shares are up 1.67 per cent, trading at $2.44
Silk Logistics (SLH) has novated the land purchase contract for the 11-hectare greenfield site in Kemps Creek, NSW to ESR Australia.
The novation followed the companies entering into an agreement on November 4, 2021 for a cash consideration of $58 million, achieving Silk’s strategic objective.
As part of the novation, Silk has entered into an agreement with ESR under which it may enter into a 10-year lease for purpose-built warehouses on Kemps Creek.
Under the terms of the agreement, ESR is responsible for the construction and associated build costs of the warehouses.
Silk will receive an up-front cash amount of $13.55 million which includes a reimbursement of the $5.8 million deposit, stamp duty of $3.2 million and other costs incurred.
Additionally, Silk is entitled to receive up to $28.8 million subject to a number of conditions.
Plans have been outlined to identify a take-out party to transfer the land purchase contract and development risk of the site.
The long-term lease is due to commence following practical completion, which is scheduled for the second half of 2024.
The agreement may be terminated if the cost of the building works exceeds a prescribed amount and the companies have not agreed otherwise.
SLH shares were up 1.67 per cent, trading at $2.44 at market close.