25/10/2019 - 11:58

Matrix in sale-leaseback deal with APiL worth $20m

25/10/2019 - 11:58

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Matrix Composites & Engineering announced it has signed a contract with Australasian Property Investments for the sale and leaseback of its Henderson facility.

Matrix in sale-leaseback deal with APiL worth $20m
Aaron Begley says sale proceeds will ensure Matrix is well-positioned for future orders.

Matrix Composites & Engineering announced it has signed a contract with Australasian Property Investments for the sale and leaseback of its Henderson facility.

Under the contract, APiL has a 30-day option to acquire the building and leasehold improvement assets for $20 million.

Matrix will receive a $100,000 deposit from APiL, with due diligence already completed, and a further $900,000 if the sale proceeds, with settlement to take place within 30 days.

APiL will sublease the facility back to Matrix for a 20-year period, with options to extend the tenancy arrangements for a further 15 years.

The transaction represents APiL's 29th property acquisition and takes the total value of its past and present portfolio to $1 billion.

Upon completion of the sale and leaseback deal, Matrix said it expected a non-cash impairment charge of approximately $7 million, reflecting the difference between the sale price and the current carrying value of the buildings and leasehold improvements on the its balance sheet.

Matrix will pay $1.7 million per year in lease payments, subject to ongoing biannual and rental uplift and five yearly ratchet market rental reviews, reflecting an initial yield of 8.5 per cent on the purchase price.

Matrix Composites & Engineering chief executive Aaron Begley said proceeds from the sale would ensure the company was well-positioned for future orders, as the improvement of the oil and gas market was expected to continue.

“Prior to constructing the Henderson facility, we had considered involving a property investor and leasing the buildings, so it is pleasing we have been able to restructure the land lease to deliver on that original strategy,” he said.

“This transaction allows our shareholders’ capital to be deployed into higher earning active business growth opportunities, rather than being tied to low yield fixed infrastructure-style assets.”

Mr Begley said the arrangement would help the company pursue its product and business diversification strategy while continuing to service demand in the oil and gas industry.

In August, Matrix reported revenue of $38.2 million, up 95 per cent on the prior corresponding period of $19.5 million, which the company said was in line with guidance.

Its order book now stands at approximately $25 million, underwriting plant production at the Henderson facility into the second half of 2020.

Matrix shares were up 9.86 per cent to trade at 39 cents per share, as at 2:15pm AEDT.

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