Strongco completes sale and leaseback of Fort McMurray branch
July 9, 2014 - Strongco Corporation has announced that it has completed the sale and 15-year leaseback of its recently constructed branch in Fort McMurray, Alberta to Imperial Equities Inc. for the purchase price of $19.4 million.
As previously announced, Strongco plans to monetize several of its real estate holdings through sale and leaseback transactions, with proceeds to be redeployed to reduce debt. In addition to the completed sale in Fort McMurray, a Purchase and Sale agreement has been signed for the newly constructed Saint Augustin-de-Desmaures, Quebec facility, as well as branches in Val D’Or and Moncton, New Brunswick; and a Letter of Intent with a third purchaser has been agreed to for the sale and leaseback of Strongco’s main branch and head office in Mississauga, Ontario. The gross proceeds from the transactions are expected to be approximately $47 million. It is anticipated that the remaining deals will be completed in the third quarter of 2014.
“It has always been management’s intent to not tie up capital in real estate assets over the long term, and, given the substantial increase in property values within these regions, the opportunity exists for Strongco to benefit from the current market conditions and use the proceeds more effectively within the business operations,” said Bob Dryburgh, President and Chief Executive Officer. “These sale and leasebacks, including the completed transaction in Fort McMurray, support our strategy to continually strengthen Strongco’s balance sheet and deploy capital more efficiently.”
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