LONDON (ShareCast) - (Sharecast News) - Coral Products, a UK-based manufacturer and supplier of bespoke plastic products, announced the exchange of contracts for the sale-and-leaseback of two freehold properties at the Haydock Industrial Estate on Tuesday.
The AIM-traded company said the properties, sold to Glenbrook H1 for £1.7m, exceeded their book value of £1.3m.

It said the buildings would be leased back to Coral for an initial annual rent of £155,000 under a 15-year lease.

Completion of the transaction was expected in mid-February.

In a separate development, Coral said it had also finalised a £0.9m insurance settlement related to a fire in May 2020 at its subsidiary, Film & Foil Solutions.

Combined with proceeds from the sale-and-leaseback, the total gross cash inflow would amount to £2.6m.

The firm said it planned to allocate £1.1m of the funds to fully repay outstanding mortgages and other borrowings tied to the Haydock properties.

It said the remaining £1.5m would be used to bolster working capital, and strengthen its balance sheet.

Together with newly-negotiated credit facilities, the board said the cash injection would enhance the group's financial resilience and support its future operational needs.

"I am delighted that we have agreed the sale of the two properties at Haydock and finalised the settlement owed to us relating to Film & Foil," said chairman Joe Grimmond.

"The outcome being 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."

At 1200 GMT, shares in Coral Products were up 20% at 7.5p.

Reporting by Josh White for Sharecast.com.

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