Coral Products confirms sale of Haydock properties for £1.7m to boost balance sheet
Listed plastics manufacturer Coral Products headquartered in Wythenshawe, Manchester, has sold two freehold properties on Haydock Industrial Estate to developer Glenbrook for £1.7m.
The two units had a book value of £1.3m and will be leased back to Coral for 15 years with an initial lease of £155,000 per annum.
In 2021 Coral also sold a neighbouring property – its former headquarters – to Glenbrook for £3.5m.
In addition, the company told the stock market this morning that it has agreed a final settlement for the insurance claim made by its subsidiary Film & Foil Solutions Ltd relating to a fire in May 2020, resulting in a cash payment of £900,000.
Of the £2.6m of gross proceeds including the insurance claim and the proceeds from the sale and leaseback, £1.1m will be used to pay down, in full, the remainder of the mortgage on the two freehold properties and other borrowings.
The remaining £1.5m will be used to strengthen both working capital and the Company’s balance sheet, which, with newly negotiated credit facilities, “strengthens the financial resilience of the Group and is sufficient for its needs going forward.
Joe Grimmond, Chairman of Coral Products told TheBusinessDesk.com this morning that he doesn’t see much of an economic recovery and that the business is now debt free and has made a saving in interest payments on the properties – “we’ve eliminated all our long term debt, made interest savings and in times like these, cash is king,” he said.
Grimmond said of the sale and insurance settlement: “The outcome [is] a material improvement to our working capital and balance sheet and to the overall financial resilience of the Group. Together with the cost efficiencies we continue to target, we are in a much stronger position as we enter 2025.”
