31st Dec 2020 08:19
(Alliance News) - FirstGroup PLC on Thursday reported it had sold three properties in the US and Canada for total gross proceeds of USD137 million as part of its programme to rationalise Greyhound's property portfolio.
The largest sold property is Greyhound's oversized legacy garage and customer terminal facility in the downtown arts district of Los Angeles, California, to a subsidiary of San Francisco-based real estate investment trust company Prologis Inc.
FirstGroup said the agreement was finalised on Wednesday and it will receive net USD88 million in cash. The company will lease back the facility from Prologis for two years, during which it will move its terminal to a more convenient and attractive location for customers and of its garage operations to a more appropriately-sized site elsewhere, it said. The Los Angeles site had a book value of USD11 million as at September 30.
The other two property disposals are facilities in Denver, Colorado, to be sold for net proceeds of USD37 million, and in Ottawa, Ontario, for net proceeds of USD7 million. FirstGroup said the customer terminal in downtown Denver has moved to Union Station for a more "convenient intermodal passenger offering and cost savings for Greyhound," and "activities at the Ottawa garage were relocated as part of Greyhound’s withdrawal of service from parts of Canada in 2018/19."
In total, the three properties' book value was USD24 million as at September 30, resulting in a total profit for all three transactions of USD100 million, net of leaseback, property tax and selling costs.
The cash proceeds from the transactions will be used for general corporate purposes, FirstGroup said.
Shares in FirstGroup were up 2.7% at 76.00 pence in London on Thursday.
By Zoe Wickens; [email protected]
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