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TORONTO, Nov. 29, 2021 (GLOBE NEWSWIRE) -- Shawcor Ltd. (“Shawcor” or the “Company”) (TSX: SCL) today announced its plan to expand and modernize its manufacturing capabilities in the Greater Toronto Area. Shawcor has received a Letter of Intent (“LOI”) from a third party to purchase its Rexdale property in Toronto, ON and is in the process of negotiating a definitive purchase and leaseback agreement that is expected to generate net proceeds in excess of C$45 million. Pursuant to the LOI, the Company would be required to enter into a three-year leaseback arrangement for the Rexdale property to facilitate operational continuity while ultimately moving to a modernized location. Proceeds from the property sale will be used to reduce existing indebtedness. The sale and leaseback of the Rexdale facility remains subject to normal conditions for a transaction of this type and is expected to close during the first half of 2022.
"Demand for our products continues to accelerate in the Automotive and Industrial segment as the efforts to electrify our society advance,” said Mike Reeves, President and CEO of Shawcor. “To meet this demand and provide new technology solutions to our customers, a new facility is required. This move will allow us to establish a greener, more modern and efficient production facility in the region, while retaining our existing employee base and our customers. The new facility will enable us to increase our product portfolio and capacity, both organically and through acquisitions.”
The Company also announced the sale of its Guardian Mexico entity and the closure of its CSI Services entity in Western Canada, which in combination accounted for roughly C$8.6 million of revenue and C$0.4 million of EBITDA in the last twelve months, as at September 30, 2021. These actions serve to narrow Shawcor’s focus to those businesses that are best positioned to benefit from favourable long-term macro trends.
Shawcor Ltd. is a growth-oriented, global material sciences company serving the Infrastructure, Energy, and Transportation markets. The Company operates through a network of fixed and mobile manufacturing and service facilities. Its three business segments, Composite Systems, Automotive & Industrial and Pipeline & Pipe Services enable responsible renewal and enhancement of critical infrastructure while lowering risk and environmental impact.
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Forward looking information - This news release contains forward-looking information within the meaning of applicable securities laws. Words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "predict", "estimate" or similar terminology are used to identify forward-looking information. This forward-looking information is based on assumptions, estimates and analysis made in the light of the Company's experience and its perception of trends, current conditions and expected developments, as well as other factors that are believed by the Company to be reasonable and relevant in the circumstances. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from those predicted, expressed or implied by the forward-looking information. The forward-looking information is provided as of the date of this news release and the Company does not assume any obligation to update or revise the forward-looking information to reflect new events or circumstances, except as required by law.
Source: Shawcor Ltd.