LONDON (Alliance News) - Low & Bonar PLC on Monday said it has agreed to sold its Construction Fibres business, a part of Civil Engineering division, for a cash consideration of EUR6.4 million.
In the year to the end of November 2018, Construction Fibres segment recorded a loss of EUR1.8 million, out of Civil Engineering underlying divisional profit of EUR100,000.
Adfil NV will purchase the business and production assets, while Industria BV will purchase the CF factory site, the building materials firm said. The net proceeds of the disposal will be used to reduce the company's net borrowings.
The disposal will comprise the sale of all of the assets of the Construction Fibres business, including part of the company's factory in Zele, Belgium, and the associated inventory, with the consideration payable in cash upon completion, expected around July 1.
Under the terms of the agreement, all employees of Construction Fibres will transfer with the business and no redundancies are anticipatedm Low & Bonar said.
The transaction is consistent with the company's stated intention of disposing of its Civil Engineering division to allow it to further reduce its net debt levels and invest in more profitable parts of its business. As part of this strategy, Low & Bonar said it is continuing to progress the disposal of its Needle-Punched Non-Wovens business, the remaining and larger part of the Civil Engineering division.
"We are pleased to announce the disposal of the Construction Fibres business as part of our strategy to simplify our portfolio and to improve our core business," said Chief Executive Philip de Klerk.
Low & Bonar shares were trading 3.6% lower on Monday at 9.64 pence each.