RNS Number:1033Z
Baltimore Technologies PLC
26 May 2004
Disposal of Baltimore Technologies Investments Limited
London, UK - 26 May 2004: Baltimore Technologies plc (BLM) announces the sale of
part of its realised but unrecognised deferred tax assets through the disposal
of the entire issued share capital of Baltimore Technologies Investments Limited
("BTIL").
As part of the orderly asset realisation process which has continued since May
2003, the Board has been evaluating the potential to crystallise value from the
unrecognised assets represented by the Group's capital and trading losses. As a
result of this process, Baltimore today announces the sale of some #99.0 million
of realised but unrecognised deferred tax assets through the disposal of BTIL.
BTIL is a non-trading subsidiary of Baltimore Technologies plc and has been
sold, on 26 May 2004, for a consideration of #2.0 million paid in cash on
completion. The net asset value of BTIL and the profits attributable thereto at
the date of sale were zero.
Completion of the transaction resulted in an increase in the cash resources of
Baltimore Technologies plc of #2.0 million (before expenses). The net proceeds
from the sale will be used for working capital purposes.
Baltimore's Capital and Trading Losses Position
The unrecognised tax assets relating to Baltimore's capital and trading losses
are subject to numerous uncertainties and the Board believes it may never be
possible to predict to what extent, if at all, they may be monetised or
utilised.
Realised, unrecognised capital losses
Realised, unrecognised capital losses are those that have crystallised for
capital gains purposes because of an asset sale (or other deemed disposal under
the capital gains legislation) but are only recorded in the Group's accounts by
way of a note. As disclosed in the Annual Report and Form 20F for the year ended
31 December 2003, the Group has a realised but unrecognised deferred tax asset
of #145.2 million, relating to realised capital losses of some #484.0 million.
These relate to the disposal of various businesses, notably Content Technologies
Holdings Limited and, in accordance with UK Accounting Standards, the relevant
deferred tax asset was not included on the Group's balance sheet (this
information is set out in note 19, page 76, of the 2003 Annual Report). #99.0
million of this #145.2 million unrecognised deferred tax asset has been sold for
#2.0 million leaving further realised, unrecognised deferred tax assets of #46.2
million.
Unrealised, unrecognised capital losses
Unrealised, unrecognised capital losses are inherent capital losses that have
not yet been crystallised for tax purposes. Not all unrealised capital losses
may be allowable losses if crystallised currently because of the operation of
the legislation that provides a tax exemption for disposals of substantial
shareholdings in trading companies. Under that legislation, as currently
enacted, such losses may become allowable if crystallised at some future time.
At 31 December 2003, the Directors estimate that the Group had unrealised and
unrecognised capital losses amounting to #1.2 billion. These losses would not
ordinarily become available to the Group until approximately December 2005.
Unrecognised trading losses
The Group has substantial unrecognised trading losses. However, in view of the
cessation of the Group's businesses, the Directors consider these losses to be
of little value.
- ENDS -
About Baltimore Technologies
Following the completion of the disposal of Baltimore Technologies' core PKI
business on 2 December 2003, the continuing Group's assets consist primarily of
cash.
www.baltimore.com
For further information
Smithfield +44 (0) 20 7360 4900
Andrew Hey
Nick Bastin
This information is provided by RNS
The company news service from the London Stock Exchange
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