Sydney, July 18, 2006 AEST (ABN Newswire) - Life Therapeutics (ASX: LFE) announced today that it has exchanged contracts with MacarthurCook Ltd (ASX: MCK) for the sale of its Frenchs Forest building.
The building will be sold for A$9.25m which will generate approximately $3.5m of free cash for Life Therapeutics. Life Therapeutics will also report a profit of approximately A$1.5m in the 06/07 financial year on the sale of the building. Settlement is expected to occur on 31 st August 2006.
Impact on Life Therapeutics
"This is a significant development for Life Therapeutics as it completes the sale of the last Australian asset while generating free cash of $3.5m and a profit of A$1.5m," said Dr. Hari Nair, CEO and Managing Director of Life Therapeutics. "The funds from this sale will be used to retire A$5.3m debt making Life Therapeutics virtually debt free excluding the Convertible Notes" said Dr Hari Nair, "The sale of the Frenchs Forest building is also an important step in the Company's Level II ADR listing process. Further, the sale will also save Life Therapeutics over A$700,000 pa in interest and building maintenance", Dr Nair added.
NuSep - a Spin off of Life Therapeutics
As part of this sale Life Therapeutics Australian division, NuSep, will lease the entire building for a period of 7 years. NuSep has agreed to lease the entire building as it needs more space to expand its gel production a result of increased sales over the last 3 months.
Life Therapeutics is spinning out NuSep as a separate listed company and expects this process to be completed during the second quarter of this year. The spinout of NuSep will result in the transfer of all Australian operations, including 30 personnel, and is expected to provide an overall saving of A$2m to Life Therapeutics.
Contact
USA
Jesse McCorvey
Ph +1 404-300-5030
Australia
Prakash Patel
Ph +61 2 8977 9000
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