Sale and Lease Back Contract (5217B)

TIDMMRX

RNS Number : 5217B

Metalrax Group PLC

18 February 2011

 
For Immediate Release  18 February 2011

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 a sale and leaseback agreement with Audax Properties plc. This transaction relates to the Group's property on Sedgwick Road, Luton, LU4 9DT where Toolspec, a Group subsidiary which manufactures sub assemblies for the off-highway and automotive sectors, is based. This follows the earlier sale and leaseback of two of its properties in December 2010,

The cash consideration receivable by the Group is GBP880,000, payable on completion and the Group has entered into a 15 year lease, with yearly rent reviews. The commencing rent will be GBP100,000 per annum.

The proceeds from this sale and leaseback transaction will be used to reduce the Group's bank borrowings. The reduction in interest costs associated with this debt repayment will be c.GBP65,000 meaning that the net cash impact to the Group of this transaction will initially be in the region of GBP35,000 per annum. The property being disposed of has a net book value of GBP880,000.

The Group will be announcing preliminary results for the year ended 31 December 2010 on 15 March 2011.

Andrew Richardson, Chief Executive of Metalrax, commented:

"We remain focused on reducing our gearing by cash generation from both operations and asset sales. The sale and leaseback of this property along with the additional sales, in January 2011, of two un-utilised sites has enabled further debt reduction since the beginning of this year in excess of GBP1.7m.

For further information, please contact:

 
 Metalrax Group PLC 
 Andrew Richardson, Chief Executive    0845 030 3300 
 
 Arden Partners 
 Steve Douglas                         0121 423 8900 
 Jamie Cameron                         0207 614 5925

This information is provided by RNS

The company news service from the London Stock Exchange

END

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