LONDON (ShareCast) - Mears, a housing repairs and maintenance provider, has agreed to sell its subsidiary, HMEL, to a specially created acquisition vehicle, Curzon 3003, which is owned and controlled by key HMEL management personnel.

Mears will sell HMEL for an initial £1, receiving a deferred consideration of up to £7m once the transaction is completed.

In addition, Mears is converting an existing inter-company loan into a £2m interest-bearing secured loan to be repaid after five years, and a £7m unsecured loan, which is to be repaid out of money earned on certain existing contracts and a share of future profits generated.

The transaction will enable the group to realise some cash in the next 12 months and will allow its senior management to fully focus on the two core divisions of social housing and care without the distraction of HMEL, it said.

NR

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