Educational Development Corporation (EDC) has signed a Sale and Leaseback Agreement for its headquarters and distribution warehouse in Tulsa, Oklahoma.
The sale proceeds will be used to pay off outstanding loans with the company's bank, leading to improved cashflows and reduced borrowings.
The agreement includes selling the Hilti Complex while retaining ownership of the adjacent land parcel.
Fund Utilization
Sale proceeds will pay off Term Loans and Revolving Loan outstanding in the Credit Agreement.
Financial Impact
Reduced borrowings will result in improved monthly cashflows and operational cashflow strength.
Lease Details
A 10-year Lease at $8.00 per square foot with 2.5% annual escalations has been negotiated with the Buyer.
Tenant Arrangements
Existing tenant leases with Hilti and Crusoe Energy will be assigned to the Buyer.
- The sale will allow EDC to reduce borrowings, save on interest costs, and strengthen cashflows.
- Operational cashflow is expected to be robust in the future due to the conversion of excess inventory into cash.
The sale and leaseback agreement marks a strategic move by Educational Development Corporation to enhance financial stability and unlock potential cashflow benefits. This decision aligns with the company's goal to reduce borrowings and improve operational efficiency.