CSE Global plans to sell a US industrial property for US$29.25 million ($40.01 million) and will channel gross proceeds of some $15.6 million into buying a larger property as part its business expansion.
The property sits on 16.68 acres of land and has 215,474 sq ft. It is in North Houston and CSE W Industries, a wholly-owned unit of CSE Global , is now a tenant.
According to CSE Global on Jan 3, this subsidiary will continue to lease the space from the buyer, Gladstone Commercial Limited Partnership, to continue its manufacturing activities.
The property is now carried on CSE Global's books at a net book value of US$17.78 million.
On a pro forma basis, the completion of the sale will see its NTA per share increase from 19.96 cents to 21.86 cents as of Dec 31 2023, and EPS increase from 3.66 cents to 5.57 cents.
CSE Global was recently in the news after it commenced legal proceedings against a customer in the US. This unnamed customer is the main contractor for a project and CSE W-Industries is a sub-contractor.
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In connection with the project, CSE Global and W-Industries jointly applied for a counter standby letter of guarantee from a bank (SBLC) issued in favour of the customer as the beneficiary.
The SBLC can be drawn only to repay the customer for amounts due, owing and unpaid from W-Industries to the customer under the subcontract between W-Industries and the customer.
According to CSE Global, the customer called on the SBLC and the bank made a payment of US$6 million to the customer on Dec 20.
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"The company and the board are of the view that the call on the SBLC by the customer was frivolous and without merit," says CSE Global.
CSE Global shares closed at 43 cents on Jan 3, up 2.41% for the day and up 1.19% in the past 12 months.
