07.07.2014

Tat Hong sells Australian premises

Tat Hong has announced the sale and lease back of five Tutt Bryant locations in Australia in order to reduce corporate debt.

The sale and leaseback agreement, worth A$30 million ($28 million) has been concluded with TransLinQ Income and includes

- 6 Ferngrove Place, South Granville New South Wales
- 8 Ferngrove Place, South Granville New South Wales
- Lots 47 & 48 Motorway Business Park, Ormeau, Queensland
- 10 -14 Ashover Road, Rocklea, Queensland
- 50 Great Eastern Highway, South Guildford, Western Australia

Tutt Bryant will rent the properties from TransLinQ for a minimum of 10 years at $2.5 million per annum with an index linked adjustment and market review every four years.

The Properties have a net book value of $19.4 million realising a gain of $10.3 million after deducting expenses.
A company statement said: “The rationale for the sale and leaseback of the properties is to monetise and redeploy the cash proceeds for better use in reducing bank borrowings and for working capital purposes.” It also added that the funds will save around $1.7 million in interest costs and $400,000 in depreciation.

Tat Hong has been struggling recently with lower revenues and falling profits, thanks to the local economic slow down in several of the markets in which it operates. See Tat Hong decline gathers pace