The well telegraphed plan by Steel & Tube Ltd (NZX: STU) to sell and lease back a property in Christchurch has gone ahead.
Steel & Tube signed an unconditional agreement to sell its property at 375 Blenheim Road, Christchurch for $21.1 million on a sale and lease back basis.
The transaction was expected to be completed on next Friday.
Steel & Tube chief executive Mark Malpass said: “This arrangement allows us to retain our successful operations in the newly upgraded Blenheim Road distribution hub under favourable lease terms, while freeing up capital to pay down debt.”
Steel & Tube’s established operations, long term plans and recent investment into the property made it “an attractive acquisition with interest from multiple parties.”
The company expects the sale will result in a gain on sale of about $1.3 M for the financial year ending June 30. An earlier guidance provided on May 23 by the company did not include any gain on sale.