TIDMMRX

RNS Number : 5224Y

Metalrax Group PLC

23 December 2010

 
For Immediate Release  23 December 2010

Metalrax Group plc

("Metalrax" or the "Group")

Sale and Lease Back Contract

Metalrax Group plc (AIM: MRX), the niche supplier of specialist engineering and consumer durable products, is pleased to announce that it has today completed on a sale and leaseback agreement with The Scottish American Investment Company Plc relating to the following two Group properties:

-- Crossgate Road, Park Farm Industrial Area, Redditch, B98 7SN, where Weston Body Hardware, a Group subsidiary which manufactures sub assemblies for the power generation, off-highway and green energy sectors is based.

-- Northfields Industrial Estate, Market Deeping, Peterborough, PE6 8LD, where Advanced Handling, a Group subsidiary which manufactures handling solutions is based.

The consideration receivable in cash by the Group on completion is GBP1.82 million and the Group has entered into 15 year leases, with yearly rent reviews. The combined commencing rent will be GBP207,000 per annum. The reduction in interest costs associated with this debt repayment will be c.GBP108,000 meaning that the net cash impact to the Group of this transaction will be in the region of GBP100,000.

The properties being disposed of have a net book value of GBP1.97 million and this disposal will result in an asset impairment of GBP0.15 million.

The proceeds from this sale and leaseback transaction will be used to reduce the Group's borrowings.

Andrew Richardson, Chief Executive of Metalrax, commented:

"Reducing debt has been a key focus for the management team throughout this year. The disposal of these properties enables significant debt reduction. This transaction, along with several recent non-core property sales, will result in debt repayments of over GBP2.9 million. Coupled with growth in profits announced in our Interim Results, these debt repayments demonstrate a continuing strengthening of the Group. "

For further information, please contact:

 
 Metalrax Group PLC 
 Andrew Richardson, Chief Executive    0845 030 3300 
 
 Arden Partners 
 Steve Douglas                         0121 423 8900

This information is provided by RNS

The company news service from the London Stock Exchange

END

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