HKScan Corporation, Inside Information, 19 February 2021 at 1.00 p.m. Finnish time
HKScan sold the land and buildings of its Vantaa property to Sagax Finland Asset Management
By decision of the Board of Directors, HKScan Group has sold the land and buildings of its Vantaa property to a real estate investor, Sagax Finland Asset Management Oy, a subsidiary of AB Sagax listed on Nasdaq Stockholm. The transaction price is almost EUR 77 million. The transaction has no significant impact on HKScan’s result for the current year. The lease agreed in connection of the transaction allows HKScan to continue and develop its business in Vantaa for the following 20 years. The agreement also includes an option for additional years.
“We purchased the Vantaa plot of land in the spring 2020 to secure the continuity of our operations since the unit’s techno-economic life will continue well into the 2030s. We have been looking for expansion to the ownership base of the property and have reached the solution now announced, as it enables us long-term business development in Vantaa. The property sale also enables a significant reduction in the amount of HKScan's interest-bearing loans, which expands the financing base for the company's strategy implementation," says HKScan's CEO Tero Hemmilä.
With the transaction, the structure of HKScan’s financing will diversify. However, lease liabilities of the long-term lease now agreed are recognised in the company’s balance sheet as a lease liability debt in accordance with IFRS. As a result, the agreement will reduce the company’s net debt by some EUR 10 million and net debt per share by 10 eurocents. The lease HKScan will pay for Vantaa will be some EUR 5 million a year; correspondingly, the company will not be subject to depreciations related to the Vantaa property and financial expenses will decline.
“The long-term lease allows long-term business development in terms of both new forms of food production and customer deliveries close to the growing consumer concentration in Finland’s capital region. Shorter delivery distances will be increasingly important, considering environmental aspects. In addition, Vantaa’s location and logistic ability provide an interesting platform for partnerships with other food companies,” says CEO Tero Hemmilä.
HKScan’s Vantaa unit makes some 50 million kilos of meals and processed meat products annually. Nearly 120 million kilos of products are delivered annually to customers through the logistics centre located in the area. Nearly 700 food industry professionals work in the Vantaa unit.
HKScan acquired the Vantaa plot of land in April 2020 from LSO Osuuskunta using the right of first refusal included in the land lease agreement. The purchase price was approximately EUR 36 million and corresponded to the offer LSO Osuuskunta had received from a third party. In addition to the land, the transaction now made includes the buildings on the property.
Tero Hemmilä, CEO, tel. +358 10 570 2012
Heidi Hirvonen, SVP, Communications, tel. +358 10 570 6072