RNS Number:1072I
Hampton Trust  PLC
28 February 2003

28 February 2003

Hampton Trust PLC ("Hampton Trust" or the "Company")
Proposed disposal of Southend Property Holdings PLC ("SPH")

Key Points


        *      The Group's strategy is to focus on reducing the Group's cost of
        borrowings, due to the burden of servicing the Group's complicated prior
        charge structure

        *      It is proposed to dispose of SPH, a wholly owned subsidiary, for
        a cash consideration of #50,000, together with the assumption of all SPH
        liabilities

        *      SPH reported losses before and after tax for the year ended 31
        March 2002 of #15.5 million. SPH's net liabilities at 31 March 2002 were
        #7.4 million

        *      The Disposal will reduce the Group's net borrowings by
        approximately #53.2 million and its annual interest charge by #5.6
        million in line with the Board's strategy to reduce debt and the Group's
        cost of borrowings

        *      Following the Disposal, the Group's weighted average cost of debt
        will be reduced from 9.2% to 7.4%

        *      The Disposal is subject to Shareholders' approval at an
        Extraordinary General Meeting and documentation will be posted shortly

Graeme Jackson, Chairman and Chief Executive of Hampton Trust PLC, commented:

"The disposal of SPH is in line with our strategy to reduce the Group's cost of
borrowings. Following the Disposal, the Group's long term liabilities and its
weighted average cost of debt will have been substantially reduced.

Following the successful buy back of almost half of the Debenture Stock last
year, this disposal finally resolves this fundamental debt issue which has
burdened the Group for so long."

This summary should be read in conjunction with the full text of this
announcement.

Enquiries:

Hampton Trust PLC     020 7499 4994
Graeme Jackson, Chairman and Chief Executive
David Diemer, Asset Management Director
Liz Hughes

28 February 2003

Hampton Trust PLC ("Hampton Trust" or the "Company")

Disposal of Southend Property Holdings PLC ("SPH")

The Board of Hampton Trust announces that it has conditionally agreed to dispose
of the entire issued share capital of Southend Property Holdings PLC, its wholly
owned subsidiary, to Chester Property Holdings Limited for a cash consideration
of #50,000 payable on Completion. In view of the size of SPH relative to the
Group, the Disposal is conditional upon the approval of Shareholders.

Background to and reasons for the Disposal

The Board's immediate strategy is to focus on reducing the Group's cost of
borrowings due to the burden of servicing the Group's complicated prior charge
structure. As indicated in the Chairman's Statement in the Company's Report and
Accounts for the year ended 31 March 2002, the focus of the Board's activity
during that year was to complete its restructuring. The Group's prior charges
now total approximately #91.6 million and comprise of approximately #53.2
million of Debenture Stock, approximately #8.7 million of Convertible Preference
Shares and approximately #29.7 million of Convertible Unsecured Loan Stock, with
a nominal weighted average servicing cost of approximately 9.2 per cent. per
annum.

The Board's initial focus on reducing the Group's cost of borrowings was to
concentrate on the Debenture Stock, which, at 101/2 per cent., carries the
highest interest charge and is also the Group's largest principal long term
debt. It was against this background that, during the year ended 31 March 2002,
the Group successfully purchased for cancellation some #46.1 million nominal of
the Debenture Stock replacing it with bank debt, thereby reducing the Group's
annual cost of borrowings by approximately #2.4 million.

Since the repurchase and cancellation of approximately 46 per cent. of the
nominal amount of the Debenture Stock referred to above, discussions have been
held with the major Debenture Stockholders in an attempt to reach satisfactory
agreement on the terms on which those holders would agree to the Group
purchasing their Debenture Stock for cancellation. These negotiations have been
difficult and lengthy due, inter alia, to the number of parties involved and the
fact that certain Debenture Stockholders are loath to part with the attractive
rate of interest payable on the Debenture Stock. Despite these difficulties, the
Board has been determined to resolve this issue to its satisfaction and believes
it would be possible to reach agreement in principle with a majority of the
holders of the outstanding principal Debenture Stock to repurchase their Stock
for cancellation.

Although the Group's annual accounts for the past two financial years have been
prepared on a going concern basis and the audit opinions have been unqualified,
SPH has a liability to the Inland Revenue, which currently stands at
approximately #18 million, comprising approximately #14.3 million plus accrued
interest. This liability, which is overdue and payable on demand, relates to tax
withheld on Debenture Stock interest payments dating back to March 1995 which
have not been accounted for to the Inland Revenue by SPH. The Board has had
protracted discussions with the Inland Revenue in respect of a reasonable
liability and payment profile but has reached the conclusion that any such
settlement would as a necessity require a significant capital contribution or
guarantee from the Company to meet this liability.

The Group therefore finds itself in a position in which it could resolve these
two ongoing issues and, at the same time, unlock the potential of the Birmingham
Development Site which could be released from the charge over it upon the
repurchase of the remaining Debenture Stock. The Board explored various options
to source the capital necessary to acquire the Debenture Stock and satisfy its
liability to the Inland Revenue and investigated the possibility of bank finance
as the optimum method. However, whereas the Group was able to secure revolving
credit facilities on satisfactory terms 15 months ago to enable SPH to
repurchase for cancellation the #46.1 million of Debenture Stock referred to
above, it has not proved to be possible at this time for the Group to refinance
SPH's assets without a major contribution of funds from an alternative source.
Despite approaches to, and discussions with, several potential lenders, it
appears that there is neither the appetite nor the willingness to lend money to
the Group for such purposes.

In light of the above and as a result of the various negotiations which the
Board has been holding with, amongst others, the Inland Revenue, certain
Debenture Stockholders and financiers, the Directors explored the possibility of
entering into an agreement with a joint venture partner and it was through these
negotiations that the Directors first encountered CPH. CPH is a recently
incorporated private limited company formed for the purpose of investment in
commercial property and property development. CPH expressed an interest in
assisting the Board in attempting to resolve some of the difficulties it was
having in attempting to finance both its liability to the Inland Revenue and the
potential repurchase of Debenture Stock. This led to negotiations taking place
between the Board and CPH, which have concluded in the Sale and Purchase
Agreement being exchanged whereby Chester will acquire the entire issued share
capital of SPH (including SPH's liability to the Inland Revenue and its
obligations to Debenture Stockholders) for #50,000 cash consideration.

Following Completion, the Continuing Group's long term liabilities, which will
then have been substantially reduced due to the acquisition by Chester of SPH
(together with its long term debt of approximately #53.2 million in respect of
the Debenture Stock), will comprise the Convertible Preference Shares and the
Convertible Unsecured Loan Stock. These will amount in aggregate to
approximately #38.4 million with a nominal weighted average servicing cost of
approximately 7.4 per cent. per annum. The Disposal will result in an interest
cost saving to the Continuing Group of approximately #5.6 million per annum,
which would otherwise have been payable to Debenture Stockholders each year
until 2025. Furthermore, the Disposal will allow the Board to concentrate its
attentions on restructuring the Continuing Group's two remaining prior charges,
namely, the Convertible Preference Shares and the Convertible Unsecured Loan
Stock. The Board's deliberations will include an investigation into the
opportunities provided by the difference between the market price of the
Convertible Unsecured Loan Stock and its nominal value, the market price being
an indication of the amount which it might cost the Company to repurchase and
then cancel the Convertible Unsecured Loan Stock.

Information on SPH

SPH, a wholly owned subsidiary of Hampton Trust, is a property investment,
development and dealing company. The portfolio of properties of SPH includes its
interests in the Birmingham Development Site.

SPH reported losses before and after tax for the year ended 31 March 2002 of
#15.5 million on turnover of #11.7 million. SPH's net liabilities at 31 March
2002 were #7.4 million

Principal terms and conditions of the Disposal

Chester has agreed to acquire the whole of the issued share capital of SPH for a
consideration of #50,000 to be satisfied wholly in cash on Completion.

Following Completion, SPH will be indebted to the Continuing Group. It has been
agreed in a deed of guarantee that repayment of the Intra Group Debt will be
linked and limited by reference to the profit that Chester derives from the sale
of the properties owned by SPH (including its share of the Birmingham
Development Site) over a period of time. Chester has agreed to guarantee the
obligations of SPH to repay the Intra Group Debt to the extent set out in that
deed. There is no certainty that the Intra Group Debt will be repaid in full.

Financial effects of the Disposal

The Disposal will reduce the Continuing Group's net borrowings by approximately
#53.2 million and its annual interest charge by approximately #5.6 million which
is in line with the Board's strategy to reduce the Group's debt and high cost of
borrowings.

The Company's Convertible Unsecured Loan Stock restricts the amount of the
Group's net borrowings to a multiple of six times the Group's adjusted capital
and reserves. In recent years the Group's consolidated net assets have fallen,
primarily as a consequence of losses arising from the Group's high cost of
capital on its prior charges. This fall in net assets has consequently severely
limited the Group's borrowing powers and the Board's ability to progress
business opportunities. The Disposal will also have the impact of easing this
restriction.

Although intra-group balances are eliminated on consolidation by the Group,
subsequent to the Disposal the Intra Group Debt will become a third party
debtor. This debtor will remain owing following Completion. However, the Board
intends to make a provision against this balance to reflect its best estimate of
the amount of Intra Group Debt expected to be recoverable as a consequence of
the Disposal, based on the deed of guarantee regarding the repayment of the
Intra Group Debt. For illustrative purposes, this amount has been estimated to
be approximately #7.9 million.

On Completion, Hampton Trust will receive #50,000 in cash before expenses.

Current trading and prospects of the Continuing Group

Since the Company's unaudited interim results for the six months ended 30
September 2002 were released on 20 December 2002, the levelling off of the
property market as referred to in the statement accompanying those results has
not occurred and the property market has continued to deteriorate.

Although rental income levels have been maintained since 31 March 2002, this is
largely as a result of two factors. The first is the Group's improved efficiency
in rent collection and improved tenant relationships since it recommenced the
property management function in-house. The second is that any impact on tenant
profitability takes a long time to be reflected in rents payable due to the
nature of lease agreements, with long term rental obligations, reviewable
infrequently, and predominantly in an upwards only direction.

The Board believes that no further improvements in occupancy rates and rent
collection will be possible in the current poor market. However, given the
Group's geographically diversified portfolio and resultant spread of risk, the
Board does not anticipate a reduction in overall rental income for the current
financial year despite the expectation that rental values will fall in some
cases.

The Board does expect the deteriorating market to have an impact on asset
values. With yields expected to reduce, and in the absence of rental growth, the
Continuing Group will only be able to maintain value through asset enhancement.
The Board believes that this is possible in a number of areas, but does not
expect to see any increase in overall asset value at 31 March 2003.

Since 30 September 2002, the Company has disposed of four industrial units on
the Vale of Neath Business Park in Resolven, West Glamorgan, for a total cash
consideration of #1.15 million, representing a profit on disposal of
approximately #100,000. The four industrial units comprised of a total area of
approximately 40,500 square feet of freehold property. The units are currently
fully let for warehouse and commercial use with an income of approximately
#125,000 which represented an initial yield of 10.2 per cent. after costs.

The Group has also recently sold a vacant warehouse unit at 34-36 Pall Mall,
Liverpool. The property was sold unconditionally, without planning consent, to a
residential developer at a book profit of #210,000.

The Company also announces today the grant of two separate call options to
acquire the freehold property at 301 Broad Street, Birmingham, and the leasehold
land at the junction of Holliday Street and Bridge Street, Birmingham. Upon
exercise of these options the aggregate consideration payable by the
optionholder will be #3.55 million.

The Board will continue to explore opportunities for further sales as they
arise, either to take advantage of improvements made to specific properties, or
as a defensive measure where it believes that a significant risk would result if
the Group continued to hold a specific property.

The Group's trading since the release of the Company's interim results on 20
December 2002 has been satisfactory given the difficult trading environment
highlighted above. The Board believes that the Continuing Group's prospects will
be enhanced by the Disposal.

Extraordinary General Meeting

For the reason stated above, the Disposal requires the approval of Shareholders
under the Listing Rules. A circular will be posted to Shareholders shortly
giving further information on the Disposal and convening an Extraordinary
General Meeting of the Company.

Definitions

"Birmingham Development Site"                        the development land surrounding Alpha Tower, Suffolk
                                                     Street, Birmingham

"Board" or "Directors"                               the directors of the Company

"Completion"                                         completion of the Disposal in accordance with the
                                                     terms of the Sale and Purchase Agreement

"Convertible Preference Shares"                      the 51/2 per cent. (net) Cumulative Convertible
                                                     Redeemable Preference Shares of #1 each in the
                                                     capital of the Company

"Convertible Unsecured Loan Stock"                   the existing issued 8 per cent. Convertible Unsecured
                                                     Loan Stock 2020 of the Company

"Continuing Group"                                   Hampton Trust and its subsidiary undertakings but
                                                     excluding SPH, following Completion

"CPH" or "Chester"                                   Chester Property Holdings Limited

"Debenture Stock" or "Stock"                         the 101/2 per cent. First Mortgage Debenture Stock
                                                     2025 of SPH

"Debenture Stockholders"                             holders of Debenture Stock

"Disposal"                                           the proposed sale by Hampton Trust of the entire
                                                     issued share capital of SPH pursuant to the Sale and
                                                     Purchase Agreement

"Extraordinary General Meeting" or "EGM"             the extraordinary general meeting of the Company


"Hampton Trust Group" or "Group"                     Hampton Trust and its subsidiary undertakings prior
                                                     to Completion

"Intra Group Debt"                                   means the net consolidated sum owed by SPH to the
                                                     Hampton Trust Group at Completion estimated to be
                                                     approximately #16.9 million

"Listing Rules"                                      the listing rules of the UK Listing Authority made
                                                     under Part VI of the Financial Services and Markets
                                                     Act 2000, as amended from time to time

"Resolution"                                         the ordinary resolution to approve the Disposal to be
                                                     proposed at the Extraordinary General Meeting

"Sale and Purchase Agreement"                        the conditional agreement providing for the sale and
                                                     purchase of SPH and made between Hampton Trust (1)
                                                     and Chester (2)

"Shareholders"                                       holders of Ordinary Shares and Convertible Preference
                                                     Shares

"SPH"                                                Southend Property Holdings PLC, a wholly owned
                                                     subsidiary of Hampton Trust and (where the context
                                                     requires) Southend Property Holdings PLC and its
                                                     subsidiary undertakings

"UK Listing Authority"                               the Financial Services Authority acting in its
                                                     capacity as the competent authority for the purpose
                                                     of Part VI of the Financial Services and Markets Act
                                                     2000

END


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