Epsilon Healthcare has completed a sale and leaseback of its Southport manufacturing facility, a transaction designed to reduce the company's debt load and underpin its longer-term growth plans.
An unnamed Brisbane-based real estate company purchased the property for $6.7 million and immediately leased it back to Epsilon under an initial 12-year term, with two further five-year extension options available.
Epsilon, which has been working to rebuild following its exit from administration, applied the proceeds to paying off a "substantial" portion of its outstanding debt.
According to the company, the transaction will produce "a material reduction in interest expense and improved cash flow".
"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 called the deal a "strategic step forward" that allows the company to unlock the value tied up in its manufacturing asset while retaining "uninterrupted access" to the site.
"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.
Financial details of the leaseback arrangement were not made public.
