Veidekke sells Sjølyst Alle: <br>REALISES A GAIN OF NOK 90 MILLION
Veidekke
Veidekke sells Sjølyst Alle: REALISES A GAIN OF NOK 90 MILLION
Veidekke ASA and its partner AS OTAS signed an agreement today on the sale of the five projected buildings at the former NEBB site at Skøyen in Oslo to Samvirke forsikring (Samvirke insurance company). When the development work has been completed, this site will have a value of NOK 920 million. Veidekke ASA's gain on this sale is NOK 90 million. The sale will take effect in the accounts from 1 January 1997.
Veidekke ASA and its partner AS OTAS signed an agreement today on the sale of the five projected buildings at the former NEBB site at Skøyen in Oslo to Samvirke forsikring (Samvirke insurance company). When the development work has been completed, this site will have a value of NOK 920 million. Veidekke ASA's gain on this sale is NOK 90 million. The sale will take effect in the accounts from 1 January 1997.
"We have obtained a satisfactory price in today's market and through this sale we are extracting the value added we want from the project, " says Veidekke's President, Terje R. Venold. Sjølyst Alle is Veidekke's largest property development project.
Under the agreement with Samvirke forsikring, Veidekke will complete the development of the project as turnkey contractors. The project consists of five buildings. The first, the Norwegian Textiles and Fashion Centre, will be completed in January and the second, the Scandic Hotel, will be finished in October 1997. The third building, where Levi's will be one of the tenants, will be handed over in November 1997. Veidekke has signed a fine-year lease for the fourth building for its new head office. Construction will start in February or March 1997 and Veidekke expects to move in October 1998. Work on the fifth building is expected to start in the second half of 1997.
All in all, the projects represents contracts worth almost NOK 500 million for Veidekke, of which work for about NOK 250 million remains to be done. The gain that now is realised refers to a project that has been under development for a number of years. The first contract for the purchase of sites was signed in 1993 and after a development period of just over two years, the first building was started in November 1995.
"Naturally enough, income from property operations is not equally distributed from year to year. We will have a substantial gain in 1997, but in return we will have a lower profit from property in the following two years. Our profit target for the property division in 1997 was based on a gain from the sale of only one of the buildings in Sjølyst Alle. The extremely positive effect the sale of the whole project will have on the company's figures in 1997 does not mean that we are focusing less than before on achieving profits in the other divisions," says Mr. Venold.
For further information, please contact:
Terje R. Venold, President & C.E.O., phone + 47 66 98 53 00, mobile phone + 47 905 82 323
Leif E. Johansen, Senior Vice President, Property Division, phone + 47 66 98 53 00,
mobile phone + 47 920 17 641
Jørgen G. Michelet, Senior Vice President, Finance, phone +47 66 98 53 00,
mobile phone + 47 906 91 117
Billingstad, December 19th, 1996
VEIDEKKE ASA