23/07/2015 - 11:03

Fleetwood in $62m deal with state

23/07/2015 - 11:03

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Fleetwood Corporation shares jumped today after the company sold the Osprey key worker village in Port Hedland to the government for $62.2 million, which will be used to reduce its net debt to zero.

Fleetwood in $62m deal with state
Osprey Village is one of many residential developments in South Hedland.

Fleetwood Corporation shares jumped today after the company sold the Osprey key worker village in Port Hedland to the government for $62.2 million, which will be used to reduce its net debt to zero.

Under new agreement with the Department of Housing, Fleetwood will continue to be paid to manage the village for at least the next 14 years.

Fleetwood announced that it had assigned the $62.2 million to its financier, Westpac.

In its annual report for June last year, Fleetwood recorded a $56 million net debt and $62.4 million gross debt, $32 million of which was related to the Osprey project.

The company’s December half-year interim financial report stated that its net debt had risen by $7 million.

The new agreement, signed on July 20, follows the previous agreement of July 2012, which was heavily criticised by the Labor opposition.

As reported by Business News, under the previous deal the government was obliged to pay $7.3 million per annum in fees to Fleetwood, irrespective of the Osprey site’s occupancy level.

This had brought opposition criticism last November after it was revealed that Fleetwood was being paid this by the government despite less than half of the homes being occupied in October 2014.

Fleetwood says in its statement today that the village is now approximately 80 per cent occupied.

At 11 am Perth time, Fleetwood shares were up 17 per cent to $1.70 a share.

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