(Alliance News) - Shares in Coral Products PLC soared on Thursday after it said it has entered into a share purchase agreement for the sale of Coral Products Mouldings Ltd and Interpack Ltd to One51 ES Plastics UK Ltd for GBP7.9 million.
The stock was trading 55% higher at 9.50 pence each on Thursday morning in London, giving the company a market capitalisation of GBP7.9 million.
Coral Products Mouldings is a manufacturer and distributor of plastic injection, extruded and blow moulded products, and Interpack is a food packaging distributor.
The plastics manufacturer and distributor said it will continue to hold the freehold for the Haydock site from which Coral Products Mouldings operates and intends to enter into a 10-year lease with One51 at an annual rent of GBP300,000 with a 5-year break clause and a rent review after 5 years.
Coral Products said that as part of the sale agreement, Chief Executive Michael Wood will resign from the board to join One51. Current Non-Executive Chair Joseph Grimmond will be made executive chair.
"The board believes the disposal provides the company with the opportunity to crystallise an attractive return on invested capital with respect to the sale companies, reduce net debt and also to provide additional financial flexibility to further develop and support the recent progress of the continuing group," it added.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Coral Products (CRU)