Fyffes has sent a circular to shareholders setting out details of the proposed demerger of the group's property assets.
The circular includes notice of an extraordinary general meeting of the company to take place at 10am on Tuesday, May 9th 2006 in the Westin Hotel, College Green, Dublin 2.
Fyffes intends to establish a new, separately quoted property company to be owned 60 per cent by Fyffes' shareholders and 40 per cent by Fyffes plc.
The new property company is now to be named Blackrock International Land.
Fyffes will transfer its property portfolio to Blackrock in exchange for a one-for-one issue of Blackrock shares to Fyffes' shareholders.
A total of 30 properties, having a combined gross asset value of approximately €197 million, will be transferred.
Associated debt due to Fyffes of approximately €63 million will also be transferred. A deferred tax liability of approximately €10 million will arise in Blackrock as a result of the demerger.
Fyffes intends to subscribe approximately €83 million to acquire a 40 per cent shareholding in Blackrock. These funds will be used to repay to Fyffes the €63 million debt associated with the property undertaking transferred to Blackrock.
Explaining the rationale for the demerger, Fyffes said that a specialised property team could develop its property assets on a significantly greater scale than if the property undertaking remained within Fyffes.
Following the demerger, Fyffes will retain properties with a market value of approximately €61 million.