CVC Limited (ASX:CVC) is a listed investment company that invests in a diverse range of assets, including private equity, real estate, and financial assets. The company has provided a market update regarding its Liverpool investment, announcing that it has entered into an agreement with the vendor to allow the put and call option deed for its property at 1 Heathcote Road, Moorebank, New South Wales, to lapse. This decision follows a comprehensive review of the project and consideration of associated risks.
The property, which was previously due to settle in March 2027 for a balance purchase price of approximately $124 million, will no longer be acquired. CVC, through its 66.7% interest in LAC JV Pty Ltd, held an option to purchase the site. Following the cessation of a planning proposal for mixed-use development, the property remains zoned E4 General Industrial. Under the new Option Lapsing Deed, LAC and the vendor, Prysmian Australia Pty Ltd, have mutually agreed not to exercise their respective call and put options. The Option Deed is set to lapse on 1 September 2026.
In consideration for LAC not exercising the call option, the vendor will pay a break fee by 30 September 2026. Additionally, the vendor will refund guarantor release payments by 30 October 2026 and all deposit payments by 29 January 2027, totalling approximately $46 million in cash inflows for LAC. LAC will maintain a mortgage over the property until the deposit refund is completed in January 2027. CVC’s Board determined this was the optimal strategy, citing identified constraints for industrial development, high downside risk, and the significant cash outflow required for settlement. While CVC has recognised a write-down of approximately $13 million against the project for the financial year ended 30 June 2026, the agreement removes a substantial future cash requirement and provides considerable cash for general corporate purposes.
