Silk Logistics Holdings Limited: Terminates Kemps Creek Lease Agreement

Silk Logistics Holdings Limited (ASX: SLH) has opted to terminate its Agreement for Lease (AFL) with ESR Australia concerning an 11-hectare greenfield site in Kemps Creek, NSW. The initial plan involved Silk acquiring and developing the site, but it had subsequently novated the land purchase contract to ESR, leading to the AFL. The AFL's validity rested on conditions, including ESR's acquisition of the land and securing necessary approvals. Despite concerted efforts, the parties failed to meet all conditions or reach a consensus on a revised commercial position.

Consequently, Silk chose to terminate the AFL, foregoing potential future lease incentives valued at up to AU$28.88 million. Notably, the termination bears no financial burden for Silk, and it has no impact on the reported FY23 trading result or the anticipated performance for the FY24 financial period. The decision reflects the complexities and challenges encountered in executing the proposed development plan, necessitating a strategic shift for Silk Logistics Holdings Limited.

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