Avgol to sell, lease-back Barkan factory

Avgol factory, photo: Eyal Yitzhar

The non-woven fabrics company expects to post a $10 million pre-tax capital gain on the deal.

Non-woven fabrics company Avgol (TASE: AVGL) reported to the Tel Aviv Stock Exchange this morning that it had signed an agreement for the sale of its rights in its 30,000 square meter factory in Barkan for NIS 52.5 million. The deal does not include the six production lines at the factory, which will remain under Avgol's ownership

The sale includes a lease-back agreement under which Avgol will lease the property and buildings for two years for NIS 4.68 million a year, with options to extend the lease for three periods of two years each.

Avgol says that assuming the deal is completed it will post a one-time pre-tax capital gain of $10 million. Completion is expected by the end of this year.

The sale of the Barkan factory is in line with the decision by Avgol's board eventually to concentrate the company's Israeli production activity in its new factory in Dimona.

The company also said that it had not reported the negotiations on the sale and lease-back deal for fear that they would have been harmed.

Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Avgol factory, photo: Eyal Yitzhar
Avgol factory, photo: Eyal Yitzhar
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