ASLR.L Regulatory News (ASLR)

15 May 2006 11:37

Pentagon Protection PLC15 May 2006 PENTAGON PROTECTION PLC Disposal of Automotive Division in line with overall restructuring Pentagon Protection Plc ("Pentagon" or "the Company"), the supplier ofspecialist window films and exclusive anchoring systems to flat glass, forenhanced security and bomb-blast protection, announces that it has disposed ofits loss-making automotive division Pentagon GlassTech Ltd. (PGT) and itsrelated automotive franchising division Pentagon GlassTech Franchising Ltd.(PGTF), for a nominal cash amount inclusive of all liabilities. The businesses have been sold to the existing management, Peter Mukherjee andGeoffrey Russell, the original founders of the divisions. The disposal of the automotive division confirms the strategic restructuring anddivestment that the Company intended, announced on 24 February, to improve itssustainable growth prospects for the future. The division has incurredsubstantial losses over the last two years. Its disposal will enable Pentagon tofocus entirely on its commercial flat glass business that offers the highestpotential for generating profits. The commercial flat glass division's revenue in the first quarter 2006 saw thecontribution of overseas sales increase significantly to 50% of all sales, upfrom 20% in the same period of 2005. Demand for blast and weather protectionfilm application on buildings is growing rapidly around the world and Pentagonis determined to take full advantage of this. The Company already has offices inthe UK, continental Europe, the Middle East, and has signed a distributionagreement with Mr. ElZayn, Chairman of Allegiance Holdings LLC, for the sale anddistribution of the Company's products in the US. The Company will look to openmore offices and sign distributor deals around the world in 2006. Graham Bannerman, Chief Executive of Pentagon commented: "The disposal of thesebusinesses is part of our ongoing strategic restructuring and we are verypleased to have completed the sale. The Senior management will now be able tofocus all their efforts on growing the core business and we are excited aboutthe prospects for growth in this area." As Geoffrey Russell was a director of Pentagon within the last twelve months,the transaction is a Related Party Transaction under the AIM Rules. Thedirectors of Pentagon consider, having consulted with its nominated adviserSeymour Pierce Limited, that the terms of the transaction are fair andreasonable insofar as its shareholders are concerned. Transaction details 1. The sale of 100% of the share capital of Pentagon GlassTech Ltd. (PGT), and Pentagon GlassTech Franchising Ltd. (PGTF). 2. The business of PGT is the supply and fitment of window films to motor vehicles and the business of PGTF is the provision of licenses and franchises for the supply and fitment of window films to motor vehicles. 3. Losses for both companies in the financial year ended 30 September 2005 totalled £778,770. 4. Net assets of PGT at 30 September 2005 were £(1,562,709) and net assets of PGTF at 30 September 2005 were £504,839. 5. The companies were sold for a level of consideration that the directors felt represented fair value at the current time for the shareholders of Pentagon. 6. Related parties: Mr Mukherjee holds 4,137,791 shares in Pentagon. Mr Russell holds 4,237,791 shares in Pentagon. Mr Mukherjee and Mr Russell jointly own 100% of the share capital of the acquiring company Pentagon GlassTech UK Ltd. Mr Mukherjee will no longer have any involvement with the Company. Mr Russellwill continue with the Company but will have no involvement in the day to dayrunning of PGT and PGTF. ENDS Enquiries: Pentagon Protection PlcGraham Bannerman, Chief Executive T. 020 8749 9749 Ben Knowles T. 020 7786 9600ben.Knowles@binnspr.co.uk M. 07900 346 978 This information is provided by RNS The company news service from the London Stock Exchange