Yorkshire Group PLC
12 September 2003
FOR IMMEDIATE RELEASE
12 September 2003
YORKSHIRE GROUP PLC ('YORKSHIRE', 'COMPANY', OR 'GROUP')
PHASED EXIT FROM US SPECIALITY CHEMICALS BUSINESS
Yorkshire Group PLC announces today that its wholly-owned subsidiary, Yorkshire
Americas Inc ('Yorkshire Americas'), has agreed the terms of a sale and purchase
agreement ('the SPA') and supply agreement ('the Supply Agreement') with
Chemical Technologies LLC ('Chem Tech'). The transaction forms part of the
Company's previously announced debt reduction strategy and net proceeds will be
used to reduce Group indebtedness.
Under the terms of the SPA, Yorkshire Americas will transfer the goodwill of its
speciality chemicals business (principally its customer list and knowhow) and
all debtors outstanding for under sixty days at completion in respect of the
chemicals business in exchange for cash consideration of approximately $1.4
million (£0.9 million), payable on completion. The assets the subject of the
SPA had a net book value of $1.1m million (£0.7 million) as at 31 August 2003.
Under the terms of the Supply Agreement, Yorkshire Americas will manufacture and
supply speciality chemicals to Chem Tech for an anticipated period of up to six
months. Yorkshire's direct costs and certain indirect costs will be covered by
Chem Tech during this period.
Yorkshire Americas contains two businesses, a dyes business and the speciality
chemicals business, the subject of this transaction. The speciality chemicals
business supplies auxiliary chemicals used in the dyeing processes. It
generated a gross profit of approximately $4.1 million (£2.6 million) on
turnover of $11.1 million (£7.0 million) in the year ended 31 December 2002.
Since the year end the profitability of the business has declined and, taking
into account the substantial operating costs associated with the speciality
chemicals business, the Board of Yorkshire concluded that it was in the
financial interests of the Group for the business to be sold.
Following the termination of the Supply Agreement, Yorkshire will be left with
certain residual assets relating to the chemicals business from which it will
seek to realise maximum value.
Yorkshire Group Tel: 0113 244 3111
Jim Perrie (Group Finance Director)
Nick Denton Tel: 0020 7645 3954
This information is provided by RNS
The company news service from the London Stock Exchange