RDI - Reading Receives $36.6MM related to NZ/Oz Properties

RDI - Reading Receives $36.6MM in cash related to New Zealand and Australia Properties

Reading International (NASDAQ: RDI) announced it has received US$36.6MM in cash related to two properties, its Courtenay Central entertainment themed retail center (ETRC) in Wellington, New Zealand and Reading's formerly owned large Burwood development parcel in Melbourne, Australia that it sold in 2014. The remaining Burwood sale proceeds, AU$37.7MM (approximately US$28.6MM), are due to Reading on or before December 31, 2017.

For Courtenay Central in Wellington, Reading received US$20MM in final insurance settlement proceeds (completing a policy maximum $25MM) for property and business interruption losses arising out of the previously disclosed earthquake damage to Courtenay Central's parking garage. The proceeds will provide the funding for the construction of a new state-of-the-art parking structure as the old structure had to be demolished. The design and construction of a brand new structure will provide Reading with the flexibility to increase the rentable square footage of and to enhance the traffic flow at the center.

Reading also received US$16.6MM from Frasers Property Australia as a partial advance payment (on amounts owed by December 31, 2017) for Frasers' 2014 purchase of the Burwood development site in Melbourne from Reading. The advance payment was triggered by Frasers closing on the resale of a portion of the site to a third party. The remainder of the amount owed to Reading from Frasers' purchase of the parcel is AU$37.7MM (approximately US$28.6MM) to be paid on or before December 31, 2017.

Based on Reading's March 31, 2017 Q1 balance sheet (without consideration of current Q2 operations), the receipt of this $36.6MM of cash reduces Reading's debt (net of cash) down to $101.2MM and adjusted net debt (when accounting for the rest of the Burwood receivable) to only $72.6MM.

Arguably, the reduction of net debt by $36.6MM should cause an enterprise value shift from debt to increased equity market value of over a $1.50/share.

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