Divestment of Stobart Rail & Civils
14 July, 2020
STOBART GROUP LIMITED
('Stobart Group' or 'the Company')
Divestment of Stobart Rail & Civils
Stobart Group, the aviation and energy infrastructure group, announces that its wholly owned subsidiary Stobart Holdings Limited has divested of Stobart Rail Limited (which owns the Rail & Civils division) to Bavaria Industries Group AG ("Bavaria") for an initial cash consideration of £1,000. An additional cash consideration of up to £2.9 million may be received based on the outcome on conclusion of a single legacy contract.
This follows the commitment made alongside the Group's FY20 results to exit the Rail & Civils business by the end of FY21, following the continued losses within that business. The agreement is on a debt free basis including the waiver of intercompany balances involving Stobart Rail and also includes the transfer of specialist plant and equipment in addition to a three-month Transitional Service Agreement for certain back office services to support Stobart Rail & Civils in the immediate term.
Warwick Brady, Chief Executive, Stobart Group, said:
"In June we set out our strategy which will see the Group focus its investment on our aviation assets, particularly London Southend Airport. The sale of the Rail & Civils business removes the obligation for the Group to fund the expected ongoing losses of the Rail business and is a first step in achieving our goal of focusing our investment on aviation."
The Transaction constitutes a Class 2 transaction for the purposes of the Financial Conduct Authority's Listing Rules.
As at 29 February 2020, Stobart Rail Limited has gross assets of £32.8 million and net liabilities of £11.8 million. The loss before tax for the year ended 29 February 2020 was £10.1 million. The transaction will result in an estimated loss on disposal of £9 million after costs, before any additional consideration which may be received. The loss on disposal and the results of Stobart Rail & Civils up to the date of disposal, will be accounted for as discontinued operations and presented below profit after tax for the continuing Group. A total of 188 employees will transfer as part of the transaction.
Enquiries:
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Group Communications Director
|
Newgate Communications Giles Croot Ian Silvera Isabelle Smurfit |
+ 44 203 757 3406 +44 203 757 6884 stobart@newgatecomms.com |
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