Hospitality services provider Civeo Corporation has agreed to sell its lodging assets in Alberta, Canada.
Opened since 2014, McClelland Lake Lodge is designed to provide a retreat for approximately 2000 guests working and living away from home.
A US-based mining project operator will purchase the accommodation for approximately C$49m, or US$36m with anticipated net proceeds of US$30 million after net demobilisation costs.
Civeo aims to close the transaction before January 31, 2024, subject to the satisfaction of customary closing conditions.
The company also expects an increase in 2023 cash flow of approximately US$20 million, with the remaining net proceeds to be received in 2024.
Civeo CEO Bradley Dodson commented: “We believe that this transaction maximises the value of the McClelland Lake Lodge assets. Driven by numerous factors, including mining activity for energy transition and inflationary pressure on newbuild pricing, demand for existing lodging assets is strong throughout North America.
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After years of solid returns from this asset, we are pleased that, subject to the satisfaction of customary closing conditions, we will have additional financial flexibility to fund growth opportunities and return capital to shareholders while maintaining our strong balance sheet.”
Civeo currently operates a total of 24 lodges and villages in Canada, Australia and the US, with an aggregate of approximately 26,000 rooms.