CSLT.L Share News (CSLT)

Cosalt, the struggling Grimsby-based safety company for the oil and gas sector, is considering an offer from its non-executive chairman.David Ross, whose family has been involved with Cosalt for 50 years, has made an offer of 0.1p per share, valuing the company at £404,000. The current market capitalisation is approximately £1.86m, so the offer is at a huge discount. Cosalt's share price at 10:45am was 0.46p, down 40% on the day, 87% on the year and 99.82% over the last five years. The immediate problems stem from the delayed sale of the firm's Marine division. That sale completed at the end of August for £27m and enabled the directors to pay down debt. Since then however Cosalt has been losing money. Net indebtedness has climbed from £7.3m in August to £12.3m at the time of today's announcement. That debt is divided into bank borrowings of £8.8m and shareholder and other loans of £3.5 million. Ominously, the board believes it may completely use up its entire debt facilities of £14.9m by year's end.David Ross has issued a personal guarantee of £0.3m for legal action currently ongoing with the Melville brothers, who sold their CTG business to Cosalt three years ago for £30m. In September last year Calum Melville resigned from Cosalt's board to "protect his reputation"Current trading conditions are described as challenging but "improving".The board now says Mr. Ross's offer will be considered "in the context of the Company's current financial condition, expected future trading and the feasibility of other available options."BS