Low & Bonar PLC Disposal (6513K)
July 11 2017 - 2:01AM
UK Regulatory
TIDMLWB
RNS Number : 6513K
Low & Bonar PLC
11 July 2017
11 July 2017
Low & Bonar PLC
("Low & Bonar" or "the Group")
Disposal of Agro-textiles Business
Low & Bonar, the international performance materials group
with leading positions in niche industrial markets, has agreed to
dispose of its agro-textiles business (comprising a part of its
Building & Industrial global business unit), for a cash
consideration of EUR7.0m (GBP6.1m) to IFG Exelto NV ("IFG"), part
of Swedish industrial group Duroc (DURC at Nasdaq Stockholm). IFG
is a leading worldwide manufacturer of polypropylene, polyethylene,
polyamide fibre and filament yarns.
The Disposal will comprise the sale of the main assets of the
agro-textiles business in both Europe and the United States,
including the Group's factory in Lokeren, Belgium, and its
inventory, with the consideration payable in cash upon completion,
subject to normal working capital mechanics.
The Disposal is expected to complete no later than 30 September
2017, subject to the fulfilment of a number of conditions,
including the satisfactory completion of an information and
consultation process with the employees affected by the Disposal,
which commenced today. Under the terms of the agreement, all
employees will transfer with the business and no redundancies are
anticipated.
The Disposal is in line with Management's stated aim of
improving operating margins in all its global business units. The
agro-textiles business is profitable, with an established market
position and an excellent customer base but requires investment to
take it through its next stage of development in improving its
efficiency and performance. The business has scope to grow with the
support of IFG, but is non-core to Low & Bonar's future
strategic aims.
The agro-textile business delivered a turnover of GBP19.9 m in
year to 30 November 2016 and the Disposal will generate an
anticipated GBP10m non-recurring loss in the second half of the
year. The net proceeds of the Disposal will be used to reduce the
Group's net borrowings, providing flexibility and headroom to fund
more profitable and cash-generative opportunities. It is
anticipated that the Disposal will be marginally dilutive to the
Group's earnings per share in the current financial year but
improve the quality of business and Group margins.
Brett Simpson, Group Chief Executive, commented:
"Our stated strategy is to actively manage our portfolio of
businesses, to increase sustainable cash generation and invest in
areas where we can achieve a clear competitive advantage.
"This disposal will enable us to reduce complexity and focus our
efforts on those areas of our business where we can offer our
customers a differentiated value proposition and build long-lasting
customer relationships."
For further information, please contact:
Low & Bonar PLC
Brett Simpson, Group Chief Executive
Simon Dray, Interim Chief Financial
Officer +44 (0)20 7535 3180
Instinctif
Matthew Smallwood
Helen Tarbet
Rosie Driscoll + 44 (0)20 7457 2020
This information is provided by RNS
The company news service from the London Stock Exchange
END
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