Southland Completes $42.5 Million Sale-Leaseback Transaction

Rhea-AI Summary

Southland Holdings, Inc. (NYSE American: SLND) has completed a $42.5 million sale-leaseback transaction involving three properties in Texas and Pennsylvania. The proceeds will be allocated as follows:

• $25 million for general corporate purposes
• $16 million for debt reduction
• Remainder for transaction-related expenses

This strategic move aims to optimize Southland's asset portfolio and improve its financial position. The sale-leaseback structure allows the company to maintain operational control of the properties while freeing up capital for other business initiatives and debt management.

Positive

• Raised $42.5 million through sale-leaseback transaction
• $25 million available for general corporate purposes
• $16 million allocated for debt reduction

Negative

• None.

Insights

Financial Analyst

Analysis: Southland Holdings' sale-leaseback transaction is a strategic move to generate liquidity and manage debt. By converting real estate assets into liquid capital, they free up $25 million for corporate use and $16 million to reduce liabilities. This improves their balance sheet and provides flexibility for future investments.

Implications: For investors, this action shows proactive financial management. In the short term, it may boost the stock due to improved liquidity and debt position. Long-term, it signals a focus on core operations over property management, which can lead to more sustainable growth.

Real Estate Expert

Analysis: The sale-leaseback transaction indicates Southland's intent to offload non-core assets while retaining operational control through leasing. This is a favorable trend for companies looking to stay asset-light while raising capital. The valuation of $42.5 million seems reasonable given current market conditions and the locations involved.

Implications: Real estate investors might view this positively as it demonstrates a strategic reallocation of resources. The real estate market benefits from such transactions as it increases property availability without disrupting operational continuity.

Debt Analyst

Analysis: Allocating $16 million from the proceeds to debt reduction is a prudent step. This action indicates Southland's effort to strengthen their financial health by lowering interest expenses and improving their debt-to-equity ratio. Such moves are beneficial from a credit rating perspective and can lower borrowing costs in the future.

Implications: For debt investors, this is a positive signal of fiscal responsibility. It likely enhances the company's creditworthiness and reduces default risk, making Southland more attractive for future lending or bond issuance.

GRAPEVINE, Texas--(BUSINESS WIRE)-- Southland Holdings, Inc. (NYSE American: SLND and SLND WS) (“Southland”) announced today that it completed a sale-leaseback transaction for three properties totaling $42.5 million. The properties include two locations in Texas and one in Pennsylvania. From the total proceeds of $42.5 million, approximately $25 million will be used for general corporate purposes, $16 million will go towards reducing debt, and the remainder will cover transaction-related expenses.

About Southland

Southland is a leading provider of specialized infrastructure construction services. With roots dating back to 1900, Southland and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience throughout the world. The company serves the bridges, tunneling, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. Southland is headquartered in Grapevine, Texas. For more information, please visit Southland’s website at www.southlandholdings.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Southland’s current beliefs, expectations and assumptions regarding the future of Southland’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Southland’s control. Southland’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Any forward-looking statement made by Southland in this press release is based only on information currently available to Southland and speaks only as of the date on which it is made. Southland undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723095753/en/

Southland Contacts:

Alex Murray

Corporate Development & Investor Relations

amurray@southlandholdings.com

Source: Southland Holdings, Inc.

FAQ

What is the value of Southland Holdings' recent sale-leaseback transaction?

Southland Holdings (SLND) completed a sale-leaseback transaction for three properties totaling $42.5 million.

How will Southland Holdings use the proceeds from the $42.5 million sale-leaseback?

Southland Holdings will use $25 million for general corporate purposes, $16 million for debt reduction, and the remainder for transaction-related expenses.

Where are the properties involved in Southland Holdings' sale-leaseback transaction located?

The properties involved in Southland Holdings' (SLND) sale-leaseback transaction include two locations in Texas and one in Pennsylvania.