Finning International Inc. has reached an agreement with H&R Real Estate Investment Trust to sell and lease back its industrial properties in Canada.
The deal will raise $80 million in capital for Finning. Included in the deal are the Edmonton head office of Finning (Canada), the Calgary main branch and 17 other properties located in B.C., Alberta and the Northwest Territories.
Finning will be entering into 20-year leases on the properties, with options to renew. Scheduled lease rate increases are built into the contract every five years.
“This transaction is another important step as we continue to focus on divesting and monetizing non-core assets,” said Doug Whitehead, president and CEO of Finning International Inc. “We will use the proceeds from this sale to reduce our debt in the short term . . . These funds will allow us to continue to pursue other alternatives which will further enhance the value of our company to our shareholders.”
The transaction is expected to close in February.
Finning International Inc. (FTT-TSE) sells, rents, finances and provides customer support services for Caterpillar equipment and engines, and complementary equipment in Western Canada, the U.K. and Chile.
H&R REIT is a TSE-listed, closed-end real estate investment trust. The REIT holds interests in 24 office properties, 50 single-tenant industrial properties, 12 retail properties and five development projects throughout Canada.
