20 Feb 2013 07:00
East West Resources plc
Disposal of Ambrian Energy GmbH
East West Resources plc ("the Company" or "EWR" and, together with its subsidiaries, "the Group") announces that it has completed the sale of its wholly owned subsidiary Ambrian Energy GmbH ("AEG") to German wholesale oil trader and tank storage operator, HGM Energy GmbH ("HGM"), for a cash consideration of US$ 2.65 million. AEG was the Group's biofuels trading business and will continue this operation under its new ownership.
For the six months ended 30 June 2012, AEG recorded an unaudited pre-tax loss of £0.93 million (compared with a pretax profit of £0.95 million for the year ended 31 December 2011), and as at 30 June 2012, AEG had unaudited net assets (including a subordinated loan from the Company) of £4.03 million.
In November 2012, the Board decided to focus resources on its core business of metal trading and welcomed HGM's interest in acquiring the Group's biofuels trading business. EWR intends to apply the liquidity increase arising from the sale of AEG towards strengthening the Group's metal trading business and for its general working capital purposes.
Prior to 31 December 2012, AEG repaid to EWR US$ 1 million of the subordinated loan referred to above. This repayment when aggregated with the cash consideration received from the sale of AEG will result in the Company receiving a net amount (after costs) of c£2.25 million in respect of its investment in AEG.
Based on unaudited management accounts for the year ended 31 December 2012, the Group expects to report a loss on its continuing operations of around £1.0 million, largely as a result of the Group's legacy overhead cost structure and a number of one-off costs. However, the new financial year has started with improved market conditions and the Group's metals business is trading in line with expectations and the order book is significantly ahead of that at the equivalent point last year. The Company continues to strive to reduce its overhead cost structure to a level commensurate with the size and nature of its continuing operations and to tailor its organisation to the new business model it is pursuing.
Commenting on the transaction, Charles Crick, Chairman of EWR said:
"The sale of AEG provides a timely opportunity for EWR to apply its full resources to its metals trading business. At the same time, we are pleased to have found a new home for the biofuels business with a larger player in the sector, giving AEG a stronger platform for its activities. We can now focus our attention on building our core business in the metals and minerals industry."
For further information please contact:
East West Resources plc
Roger Clegg, COO +44 (0)20 7634 4785
Cenkos Securities plc
Jon Fitzpatrick +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Notes to Editors:
EWR is active in the physical trading of base metals (primarily copper). It sources and supplies a variety of commodities to end users all over the world. Supported by its offices in London and Shanghai and a network of agents in North and South America, Asia and the Middle East, EWR provides producers and consumers with its marketing insight whilst emphasizing the financing and risk management aspect of its trading activities. EWR also holds and manages a number of equity investments. EWR is quoted on the AIM section of the London Stock Exchange under the ticker symbol EWR.