ANNINGTON FUNDING PLC
(incorporated with limited liability in England and Wales)
19 August 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW OF THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED ("EUWA") ("UK MAR").
Legal Proceedings Filed
Annington Property Limited ("Annington") has today filed legal proceedings against the Secretary of State for Housing, Communities and Local Government challenging provisions of the Leasehold and Freehold Reform Act 2024 (the "Act"), which are not yet in force. The Act includes provisions which create a new mechanism to calculate compensation payable to a landlord when the landlord is subject to a claim for enfranchisement of a lease. The mechanism as currently drafted in the Act, appears to give rise to the possibility that, in certain specific circumstances, a lessee could acquire the freehold and intermediate leasehold interests for a very low valuation that does not reflect market value.
Annington holds a valuable intermediate leasehold interest with respect to the Married Quarters Estate. Annington believes that under the terms of its contractual relationship with the Ministry of Defence it is not impacted by the mechanism of the Act described above. However, there is a risk that a Court may interpret the contractual provisions differently and may find the relevant provision of the Act applicable to Annington. Annington has filed these legal proceedings seeking clarity on the operation of the Act in order to address this risk.
If relevant provisions of the Act were applicable to Annington once in force (which Annington does not believe to be the case), Annington would be at risk of receiving significantly less than market value for that intermediate leasehold interest in the event of its enfranchisement. Annington has brought this claim on a protective basis, pending clarification from the Government which may resolve the matter. Had Annington not commenced the claim at this time, it may have lost the right to challenge the Act. Annington understands that it is likely that a number of other parties will also challenge provisions of the Act in the near term.
The claim is separate to Annington's ongoing litigation with the Ministry of Defence with respect to the latter's attempts to enfranchise the Married Quarters Estate.
Stephen Leung
Chief Financial Officer
Media Enquiries:
Annington Funding plc
Hays Lane House
1 Hays Lane
London
SE1 2HB
This notice is released by Annington Funding plc and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended ("EUWA")("UK MAR"). For the purposes of UK MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055 as it forms part of domestic law by virtue of the EUWA, this announcement is made by Stephen Leung, Chief Financial Officer of Annington Limited.
LEI: 549300KK63W8VZIONZ83
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