Canadian Tire announces sale and leaseback of Brampton Distribution Centre
Tuesday, Jan 24 2006, 12:00
Canadian Tire Corporation recently announced that it has reached agreement for the sale and leaseback of two distribution centres, one located in Brampton and the other in Calgary, Alberta, to H&R Real Estate Investment Trust for total proceeds of $229 million. Proceeds from the transaction will be used to fund strategic initiatives outlined in the Companys 2005 - 2009 Strategic Plan.
“The current real estate environment is favourable for this type of transaction," says Wayne Sales, president and CEO, Canadian Tire. "We were able to take advantage of market opportunities for the sale and leaseback of the distribution centres in a manner that maintains our operating flexibility while freeing up capital to re-deploy in the business. The leases we have negotiated have lengthy and favourable terms and we have secured complete operating control of the two facilities over the long term."
The Agreement of Purchase and Sale, approved by the Canadian Tire Board of Directors, is conditional on the completion of due diligence by H&R and approval of the purchase by Competition authorities. The transaction is expected to close in January of 2006.
Canadian Tire expects to realize a pre-tax gain of approximately $50 million, which will be amortized over the initial 21-year term of the negotiated lease agreements.
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