Epsilon Healthcare has sold and leased back its Southport manufacturing facility in a move to cut debt and support its long term growth strategy.
An unidentified Brisbane real estate firm acquired the site for $6.7 million before immediately leasing it back to Epsilon for an initial 12-year term, with two five-year options to extend.
Epsilon, which is striving to rebuild the business after exiting administration, has used the funds to repay a “substantial” portion of debt.
The move will result in “a material reduction in interest expense and improved cash flow”, the firm said.
“A substantial part of the debt was caused by the company being placed into voluntary administration by the two former directors,” Epsilon said in an announcement to the ASX.
Epsilon chief executive and managing director Peter Giannopoulos described the deal as a “strategic step forward”, enabling the firm to unlock the value of its manufacturing asset while ensuring it has “uninterrupted access” to the facility.
“By reducing our debt burden and improving financial flexibility, we are better positioned to pursue our commercial and strategic expansion priorities, deliver value to shareholders and support our long term growth strategy,” he said.
The terms of the leaseback arrangement were not disclosed.