TROPICAL Battery Company Limited has completed a sale-leaseback of its Ferry Road headquarters, generating gross proceeds of $950 million, with part of the funds used to repay higher-cost debt and the balance deployed to working capital.

Under the arrangement, Tropical Battery sold the property but continues to operate from the same location under a long-term lease. The company said there will be no disruption to its business operations.

The transaction forms part of a broader deleveraging programme aimed at reducing the group’s debt load and lowering interest costs after a period of rapid expansion and acquisition activity.

As at March 31, 2026, Tropical Battery reported total interest-bearing borrowings of $4.49 billion, comprising short-term loans of $962.5 million, long-term loans of $3.21 billion and lease liabilities of $319.3 million. The company’s largest single long-term facility was its convertible cumulative redeemable preference equity, with a carrying value of $2.31 billion.

“We owned a building. That building had real value — but it was not generating a return that justified the cost of the debt secured against it, and it was not liquid,” said Tropical Battery CEO Alexander “Zander” Melville.

“We unlocked that value, paid down expensive obligations, and put the capital to work in the operating business,” he added.

Tropical did not disclose the exact amount used to repay debt, but said a material portion of the proceeds went towards higher-cost facilities, reducing interest expense on a go-forward basis. The balance has been allocated to inventory and other operating needs across its distribution network.

The company stressed, however, that the transaction is not a simple debt-elimination exercise. Under accounting rules, the sale-leaseback will place both a right-of-use asset and a corresponding lease liability on Tropical Battery’s consolidated balance sheet.

In practical terms, the company has exchanged ownership of the property for cash that can be used in the business, while taking on a lease obligation for continued use of the same headquarters.

“A sale-leaseback is not cost-free. We now have a lease obligation, whereas previously we had a mortgage,” the company said.

Tropical Battery said further details on the right-of-use asset, lease liability, lease amortisation schedule and impact on reported debt metrics will be provided in its next interim financial statements. The company did not disclose the lease term or the annual lease cost.

The Ferry Road transaction is one of several steps being taken to reshape the company’s balance sheet. Other measures include a Development Bank of Jamaica financing process for Tropical Renewable Energy, a Sygnus Capital extension completed in the prior period, and ongoing talks with institutional lenders.

Tropical Battery said lower debt should reduce interest expense, allowing more operating profit to reach the bottom line and supporting reinvestment and, over time, dividends.