Trinity Biotech, the Braybased and Nasdaq-listed biotechnology group, has announced the disposal of its Bray, Co Wicklow, property in a sale and 20-year leaseback arrangement, for $5.85 million (€5.7 million). In a separate transaction, it has raised $5.5 million (€5.3 million) in new financing. The sale and leaseback transaction with Norwich Union covers Trinity's headquarters in Bray, a 45,000 sq ft facility on around three acres. The company purchased the property in December 1997 and said it made significant improvements to ensure compliance with ISO and FDA regulations. Trinity said it made a strategic decision to sell this property and to invest its available capital in its core business. The profit on the property sale was over $1.25 million, but the impact on the profit and loss account will be neutral because the interest repayments and depreciation on the building are in line with the rent to be paid, said chief financial officer Mr Jonathan O'Connell.
The proceeds from the sale of the property have been used to pay off mortgages outstanding on the premises and other debts. The new financing is two-pronged: a $3.5 million debenture with a coupon of 7.5 per cent, $2.5 million of which is repayable in two years and $1 million in three years. The holder of the debenture has the option to convert the loan into Trinity shares at a price of $1.80. The other part of the financing was the issue of $2 million in shares at a 7.5 per cent discount to the market. On full conversion, the unnamed British and German institutions in the financing would end up with a 10 per cent stake in the enlarged group, according to Mr O'Connell.
Mr Ronan O Caoimh, chief executive, said the transactions greatly strengthened the company's balance sheet by reducing bank borrowings from $7.4 million to $5.3 million at the start of last year. Also, its deferred payment obligations in connection with acquisitions have been reduced from $11.1 million to $3.9 million. The group's gearing, he added, had now been reduced from 157 per cent to an undemanding 56 per cent. This, he said, would enable Trinity to develop aggressively its core business through increased R&D and marketing activities. Trinity's latest results showed a 71 per cent rise in after-tax profit to more than $1.2 million in the third quarter to September 30th, 1999. Earnings per share grew by 54 per cent to 4.3 cents.
Trinity Biotech develops, manufactures, and markets some 100 products which include tests for pregnancy, HIV and other sexually-transmitted diseases. It sells its products in over 75 countries through 130 international distributors and partners.
