National tile retailer Topps Tiles has agreed a deal to sell off its head office and central warehouses in Leicester in a bid to firm up its finances in the face of the economic challenges anticipated in connection to the coronavirus pandemic.
UK Warehouse Properties Limited has purchased the buildings for £18.1 million, including costs. According to a statement from Topps Tiles, the balance will be paid in cash on completion, currently set to take place in early June. The buildings had been listed as an asset worth £14 million on the corporate balance sheet.
Under the terms of the deal, Topps Tiles will pay an annual rent of £1.2 million to lease back the properties, located on the Grove Park industrial estate, for 20 years. Accordingly, right of use assets worth £15.7 million will be reflected on the Group’s balance sheet, along with associated lease liabilities of £15.7 million.
In a statement, the firm said that ‘the proceeds from the Sale will further strengthen the Group’s financial position as it responds to the COVID-19 crisis’.
After completion of the sale, the company estimates that it will have net debt of around £7 million with around £42 million of available liquidity. This includes a £10 million loan facility from the government-backed Coronavirus Large Business Interruption Loan Scheme, which the Company announced on 19 May 2020 and which is due to be finalised shortly.