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Decode Sells Reykjavik HQ; Profit to Help Internal Drug Discovery

NEW YORK, April 5 (GenomeWeb News) - Decode Genetics has sold its headquarters in Iceland to real-estate company Festing ehf for $55 million, and will lease the property back from the firm for 15 years, Decode said in an SEC filing yesterday.

 

Decode will use the proceeds from the sale to prepay approximately $36 million in long-term debt that was secured by mortgages on the property, as well as $4.5 million in "short-term borrowing," Decode said in the filing.

 

Decode expects to write-off $1.2 million in capitalized borrowing costs charged due to the prepayment. Decode said it will use the remainder of the proceeds - roughly $14.5 million - "to advance" its drug-development programs.

 

The deal, struck on March 31, calls for Decode lease back the property under a non-cancelable lease agreement for 21,420,000 Icelandic kronas (around $350,000) per month, "subject to changes based on the Icelandic consumer price index ."

 

The monthly rent will be revised as of July 1, 2010, to "reflect changes in capital markets as well as Decode's credit quality," Decode said.

 

Decode will continue to pay property taxes and insurance and will be responsible for the property's maintenance, the company said.

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