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St Modwen in 4M-SF Longbridge Sale/Leaseback

LONDON-Car manufacturer MG Rover has agreed a pounds 42.5-million ($77-million) sale/leaseback with St Modwen Properties covering 4.3 million sf of buildings on 228 acres of land at its Longbridge plant near Birmingham.

By Graham Parker | Updated on January 07, 2004

LONDON-The struggling car manufacturer MG Rover has raised £42.5 million ($77 million) through a sale/leaseback as part of its massive Longbridge plant near Birmingham. St Modwen Properties has bought 228 acres of land housing 4.3 million sf of factory buildings. In return it has granted MG Rover a 35-year lease at an initial rent of £3.6 million ($6.5 million) per annum with annual fixed uplifts and an option to renew on expiry of the lease.

MG Rover’s operational activities on the land will not be restricted but provision is made for the release of surplus land at MG Rover’s option. MG Rover Group chief executive Kevin Howe says: “This deal generates cash for our cars business today and allows us to continue to invest in the car company’s many product development activities. It puts to work one of our assets but in no way restricts the day-to-day running of our business.”

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