Disposal of Manabo's Chain Mail Glove Business
Severfield-Rowen PLC
3 March 2000
For further information please contact:
Severfield-Rowen PLC
Peter Levine, Chairman 0113 246 9993
Peter Davison, Finance Director 01845 577 896
Financial Dynamics
Sarah Marsland 020 7831 3113
Severfield-Rowen PLC
Disposal of Manabo's Chain Mail Glove Business
Severfield-Rowen PLC, the UK's leading structural steel manufacturer and
erector, announces today the sale of its loss-making Manabo chain mail glove
manufacturing business to Wells Lamont Limited, a member of the Marmon Group
of Companies, for an initial consideration of £2.1 million in cash. A further
£600,000 is payable in two equal instalments over the next two years and there
is an additional variable royalty payment over a five-year period of up to
£475,000.
The Marmon Group is a US based manufacturing and services group and operates
internationally. It is one of the largest private companies in the United
States and in the year ended December 1998 had consolidated revenues in excess
of $6billion.
All the 45 employees of the Manabo gloves business, together with its existing
UK manufacturing sites near Thirsk, will be transferred to the purchaser.
Manabo KFT, the Hungarian gloves manufacturing business of Manabo, and its
non-trading intermediate holding company, Manabo (Hungary) Limited, will also be
acquired as part of the sale.
The business being disposed of made losses in the year to December 1998 of
approximately £2 million. After repaying outstanding asset finance on some of
the items being sold, amounting to £780,000, the net proceeds of the sale will
be invested in the core structural steel business of Severfield-Rowen.
On completion of the sale, Severfield-Rowen will retain the assets of the
glove cleaning and knife sharpening businesses. These assets shall retain the
Manabo name on their products and machines, under license from Wells Lamont
Limited. Severfield-Rowen PLC is currently in discussions with interested
parties regarding the sale of these remaining businesses.
The glove cleaning and knife sharpening machines are to be written off in
full, leaving no assets remaining in the business. The total write-off as a
result of the sale of the gloves business and write-down of the remaining
assets will be approximately £2.8 million and this will be included in
Severfield-Rowen PLC's 1999 financial statements.
Peter Levine, Chairman of Severfield-Rowen PLC, commented: 'In the last
twelve months we have concentrated on improving the cost base and operating
efficiency of Manabo to establish it as a viable and saleable business. This
sale has enabled us to realise some of the value in Manabo by selling the
majority of its operations to a Group that has strong presence in the relevant
sector and will therefore be able to build product sales more rapidly in the
future.
'Structural steelwork is our core business and we are proud of our
manufacturing facility in Dalton, Yorkshire, the largest and most efficient
single production facility in Europe. Our group is rapidly becoming a 'brand
name' within the worldwide structural steel industry. We recently announced
capital investment to add a fifth production line to this site to respond to
the growing demand in our market.
Having disposed of the majority of Manabo's business, we are now able to focus
our efforts entirely on our steelwork business. Recognising the ever present
need for promoting shareholder value the proceeds of sale of the Manabo
business have been earmarked towards the Groups development plans for both
organic and acquisitional growth of the core business.'
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