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expansion is subject to entry into a land purchase agreement and approval from
the municipality council of Borås Kommune and Trafikverket.
Kid announced on 3 November 2021 that the company had established a joint
venture (Prognosgatan Holding AS, “Joint Venture”) with Fabritius Gruppen AS
(“Fabritius”) to build a new warehouse facility in Sweden. The Joint Venture is
controlled by Kid (through Kid Eiendom AS) and Fabritius on a 50/50 basis.
Fabritius is a wholly owned subsidiary of Gjelsten Holding AS, which currently
holds 10.24% of the shares in Kid.
The new warehouse in Sweden has been in full operation as the central logistics
function for Hemtex since Q2-23 and is operated by Kid’s wholly owned subsidiary
Kid International Logistic AB (“KIL”).
Subject to completion of a land Purchase Agreement (the “Purchase Agreement”)
and exercise of an existing option to purchase additional land, the construction
of additional warehouse facilities of approx. 27,000 square meters is currently
expected to commence during the first half of 2024. The total footprint of the
warehouse is expected to be 48,600 square meters including the current
warehouse.
The purpose of the expansion is to establish one central warehouse for all Kid
and Hemtex markets in Borås (Sweden) with capacity for further growth and
expansion. The decision is based on assessment of the most efficient logistics
solution for the Group. Currently the Norwegian warehouse has a high degree of
filling which entails limited flexibility and increased cost. As a result of
this, the warehouse operations in Norway are expected to be discontinued during
2025.
The location of the headquarter in Norway will remain unchanged, and Kid plan to
sublease the Norwegian warehouse facilities to an external party for the
remainder of the lease period until May 2030.
The Purchase Agreement is based on an option in the agreement from 2021 and will
be exercised by the Joint Venture. The Purchase Agreement is expected to be
entered into in Q4-23 with Borås Kommune (Borås municipality) as seller and a
Swedish subsidiary of the Joint Venture as buyer, and values the 45,000 square
meter plot at approx. SEK 40 million. The Purchase Agreement will include an
option to purchase one additional and adjacent plot area within Q4-26 which
enables an additional future expansion.
The main terms and conditions of the Purchase Agreement have been agreed with
the administration of Borås Kommune and will be submitted to the municipality
council of Borås Kommune for formal approval. The Purchase Agreement is also
dependent on an approval from Trafikverket, The Swedish Transport
Administration.
Kid’s investment in the Joint Venture and fixtures and fittings in the warehouse
expansion is estimated to be approx. SEK 120-150 million and is expected to be
mainly financed with a new separate bank facility. The construction project will
be financed by the Joint Venture on a stand-alone basis through bank borrowings
with an estimated gearing ratio of 70%.
The project is not expected to impact the dividend policy for Kid.
An addendum to the current lease agreement will be entered into on market terms
for a long-term lease of the expanded warehouse between the Swedish subsidiary
of the Joint Venture (as lessor) and KIL (as lessee).
Similar to the first construction phase, the Joint Venture will have a project
management agreement with Fabritius on similar terms, where Fabritius will be
responsible for the overall project management of the expansion.
All new agreements are based on the agreements from 2021 and on market terms and
have been reviewed by an external law firm.
Petter Schouw-Hansen, Chairperson of the board of directors in Kid and Director
with Gjelsten Holding AS, and Rune Marsdal, Member of the board of directors in
Kid and CFO and Member of the board of directors of Gjelsten Holding AS, have
not been involved in the board work and decision-making process related to any
agreement between Kid and Fabritius.
DISCLOSURE REGULATION
This information is subject to the disclosure requirements pursuant to Section 5
-12 of the Norwegian Securities Trading Act.
CONTACT
Anders Fjeld, CEO, Kid ASA, +47 996 32 121, anders@kid.no
Mads Kigen, CFO, Kid ASA, +47 952 60 507, mads@kid.no
Kilde
