Disposal

31 Jul 2006 14:55

Renold PLC31 July 2006 Renold plc Disposal Further to its announcement on 6 June 2006, Renold plc is pleased to announcethat contracts have been exchanged on 31 July 2006 for the sale of certainassets and liabilities of the Group's Automotive business to Schaeffler KG("Schaeffler"). Completion is expected shortly. The divestment of the Automotive business is in line with the Board's strategyto focus on the core Industrial Power Transmission operations. Renold was arelatively small player in the automotive supply industry compared with the sizeof its major competitors. Schaeffler is in a better position to serve theautomotive market going forward. Total cash consideration of Euro 5.5 million (£3.8 million) is due atcompletion. The consideration is subject only to an adjustment in respect of thevalue of net working capital at completion. At 31 March 2006, the value of gross assets being divested under the transactionwas £22.6 million after a charge for impairment of £9.1 million. The netliabilities of the Automotive business were £21.2 million; under the terms ofthe contract, Renold will retain certain liabilities with a value of £2.9million. The Automotive business recorded an operating loss of £0.9 million in the yearto 31 March 2006. Proceeds from the divestment will be used to reduce the level of Group net debt. Enquiries: Bob Davies, Chief Executive ) 0161 498 4500 Tony Brown, Finance Director ) This information is provided by RNS The company news service from the London Stock Exchange