CHG Chemring Group Plc

RNS No 3936b
CHEMRING GROUP PLC
22nd December 1998

                       CHEMRING SELLS RONSTAN BUSINESS                        

Chemring Group PLC ("Chemring") today announced the conditional sale of the
issued share capital of Ronstan International Pty Ltd (based in Australia) and
the business and assets of Ronstan International Inc (based in the US),
together collectively called "the Ronstan Business".

The acquiror is a consortium formed for the purpose by certain of the
directors and employees of the Ronstan Business, including Mr Michael Hanlon,
a former Chemring main Board director and currently Chairman of the Ronstan
Business, and Mr Alistair Murray, Managing Director of the Ronstan Business.

Under the Listing Rules of the London Stock Exchange, the sale is deemed to be
a related party transaction and as such is conditional upon the approval of
Chemring's shareholders.  A circular and notice convening an Extraordinary
General Meeting to seek such approval will be sent to shareholders in the near
future.

Aggregate consideration, before costs, receivable by Chemring is A$7.8 million
(#2.9 million).  This will be satisfied by the payment of A$7.2 million of
cash on completion, and deferred consideration of A$600,000 due to be paid on
or before the second anniversary of completion of the disposal.

The consortium is being financed by an Australian bank, both in order to meet
the consideration and to provide working capital facilities.  As part of its
security, the bank has sought a Standby Letter of Credit in the name of
Chemring, counter-indemnified by Chemring's bankers, for A$2 million, reducing
by A$500,000 at each thirteen month renewal until May 2003 when it ceases. 
The Standby Letter of Credit cannot be called unless there has been a default
by the consortium and all of the securities available to the bank have been
exercised. 

In addition, Chemring would receive a further A$2.2 million on or before 31
December 2001 in the event that the aggregate audited earnings before interest
and tax for the Ronstan Business for the three financial years ended 30
September 1999, 30 September 2000 and 30 September 2001 were greater than or
equal to A$12.5 million or if there was a subsequent change in control (being
a transfer of voting rights of 50.1%) of the Ronstan Business from the
management team within three years of completion of the disposal.

The Ronstan Business, which is situated in Melbourne, Australia and
Clearwater, USA, manufactures and distributes rigging and deck hardware
products for the marine leisure market, and has also pioneered the use of
rigging for architectural purposes, both decorative and functional.  In the
thirteen month period to 31 October 1998, the unaudited combined pre-tax loss
after corporate charges and exceptional costs of A$2 million for the Ronstan
Business was A$800,000 (#300,000) on sales of A$22.2 million (#8.25 million).

The proceeds will be used to reduce net debt.  Included in Chemring's 1997
financial statements was an exceptional charge against profit of #2.54 million
in respect of the write-off of goodwill arising from the acquisition of the
Ronstan Business; fundamental reorganisation costs of the Ronstan Business
amounting to #125,000 were also charged as exceptional costs during that year.
The unaudited combined net assets of the Ronstan Business at 31 October 1998
were #3.8 million after prior-year consolidation provisions of #400,000.  In
the thirteen month period to 31 October 1998, the depreciation of the
Australian dollar in the period reduced the combined net assets of the Ronstan
Business by #860,000.  Further exceptional costs of approximately #436,000 are
anticipated as a consequence of the disposal, and will be charged in the
results for the period ended 31 October 1998.

The sale of the Ronstan Business completes Chemring's strategy of disposing of
its non-core businesses.

Contact:
P J Molony
Chief Executive
Chemring Group PLC
01489 881880

END


DISBBBBDRSDCCID

Chemring (LSE:CHG)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024

Chemring (LSE:CHG)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024