Forterra Announces Strategic Exchange of Assets Within Existing Sale-Leaseback Arrangement
June 11 2018 - 5:00PM
IRVING, Texas, June 11, 2018
(GLOBE NEWSWIRE) -- Forterra, Inc. ("Forterra" or the "Company")
(NASDAQ:FRTA) ), a leading manufacturer of water and drainage
infrastructure pipe and products in the United States and Eastern
Canada, today announced that it has amended and restated its
existing sale-leaseback arrangement (the "SLB"). The transaction
removed a total of 24 U.S. drainage facilities and U.S. and
Canadian concrete pressure pipe facilities from the SLB, in
exchange for Forterra's contribution of two ductile iron pipe
facilities in Bessemer, Alabama to the SLB. The transaction
is expected to provide Forterra with increased flexibility to
evaluate portfolio enhancement initiatives for the 24 facilities
removed from the agreement.
In connection with the transaction, certain
modifications to the SLB, including an increase in the lease term,
will change the accounting treatment of the SLB. The SLB will
now be accounted for as a finance lease, rather than an operating
lease, which Forterra expects will increase EBITDA and Adjusted
EBITDA and increase financing obligations on the balance
sheet. The increase in the financing obligation on the
balance sheet is expected to result in a slight initial increase in
Forterra's financial leverage after adjusting for the associated
increase in EBITDA and Adjusted EBITDA. Prior to this
transaction, Forterra expected to incur approximately $19 million
in SLB operating expenses in 2018.
The Company expects to make a cash tax payment of
approximately $17 million in 2018 as a result of a tax basis gain
on the transaction. The exchange will also increase Forterra's
annual SLB cash payments by approximately $200,000. The Company
expects to more than offset the 2018 cash impact by executing on
portfolio enhancement initiatives related to the re-acquired
properties over the remainder of 2018 and beyond.
About
Forterra
Forterra is a leading manufacturer of water and drainage pipe and
products in the U.S. and Eastern Canada for a variety of
water-related infrastructure applications, including water
transmission, distribution, drainage and stormwater management.
Based in Irving, Texas, Forterra's product breadth and significant
scale help make it a one-stop shop for water related pipe and
products and a preferred supplier to a wide variety of customers,
including contractors, distributors and municipalities. For more
information on Forterra, visit http://forterrabp.com.
Forward-Looking
Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements may be identified by the use of words
such as "anticipate", "believe", "expect", "estimate", "plan",
"outlook", and "project" and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. Forward-looking statements should not be read
as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by, which
such performance or results will be achieved. Forward-looking
statements are based on historical information available at the
time the statements are made and are based on management's
reasonable belief or expectations with respect to future events,
and are subject to risks and uncertainties, many of which are
beyond the Company's control, that could cause actual performance
or results to differ materially from the belief or expectations
expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date on which they
are made and the Company undertakes no obligation to update any
forward-looking statement to reflect future events, developments or
otherwise, except as may be required by applicable law. Investors
are referred to the Company's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K, for
additional information regarding the risks and uncertainties that
may cause actual results to differ materially from those expressed
in any forward-looking statement.
Company Contact
Information:
David J. Lawrence
Vice President of Treasury and Investor Relations
469-299-9113
IR@forterrabp.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Forterra, Inc. via Globenewswire
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