by Proceeds will help reduce debt and finance growth of its juvenile segment and the turnaround of its furniture business
MONTREAL — As part of a plan to help fund operations and reduce its current debt, RTA furniture specialist Dorel Industries Inc. has entered into a sale-leaseback transaction for its factory and warehousing facility in Columbus, Indiana.
The company said that the gross proceeds to Dorel from the sale will be $30 million, about $8 million of which will be used to reduce its existing debt, estimated at just over $400 million in September 2024. The balance has been designated for funding its ongoing operations.
The lease, which has an annual rent of $2.9 million and is subject to annual increases, has an initial term of 10 years. It can be renewed by the company for two additional periods of five years each.
The transaction is part of a plan to finance the growth of Dorel’s Juvenile segment, plus the turnaround of its Home segment announced on Jan. 30. The company said it is “diligently exploring additional opportunities to further enhance its financial position.”
Dorel said it will file a material change report with respect to the transaction on SEDAR+, also known as the System for Electronic Document Analysis and Retrieval, a Canadian database through which organizations submit financial documents.
Because the terms and conditions of the transaction were just recently finalized, Dorel said it does not plan to file the material change report at least 21 days before the closing date of the transaction. The company said the shorter period is necessary to close the transaction on a timely basis in which it can improve its financial position.
