Winnipeg, Manitoba, July 31st, 2009 � Empire Industries Ltd. (TSX-V: EIL) (�Empire� or the �Company�), today announced that it has completed the sale and leaseback of its Kingsway property in B.C. for proceeds in excess of the underlying book value.
Empire used the net proceeds received of $9.5 million to reduce both the Company�s secured long-term debt in B.C. and its operating line with HSBC. Concurrent with the sale of the property, the Company entered into a ten year fixed rate lease with the purchaser with an option to extend beyond ten years at market rates. The fixed rate lease cost under the agreement provides an initial cash flow saving of about $840,000 per year compared to the former debt servicing cost associated with the property.
�As stated in prior press releases, we are pursuing the sale of non-core assets in an effort to reduce our debt levels and this transaction is a concrete example of one such initiative. The sale and long-term leaseback of the property allows us to target our capital employed on the operation of the business as opposed to the ownership of its real estate,� said Guy Nelson, Chief Executive Officer of Empire Industries Ltd.