The disposal will comprise the sale of all of the assets of the CF business, including part of the group’s factory in Zele, Belgium, and the associated inventory, with the consideration payable in cash upon completion, subject to normal working capital adjustments.
The transaction is expected to complete on or around July 1, 2019, subject to the fulfilment of a limited number of conditions in the sale agreements and the buyer’s financing arrangements, including the satisfactory completion of an information and consultation process with the employees affected by the disposal. Under the terms of the agreement, all employees of CF will transfer with the business and no redundancies are anticipated.
The transaction is consistent with management’s stated intention of disposing of its Civil Engineering division to allow it to further reduce its net debt levels and invest in more profitable parts of its business. As part of this strategy, the group is continuing to progress the disposal of its needlepunched nonwovens business, the remaining and larger part of the Civil Engineering division. CF has an established market position and an excellent customer base, and the new owner is well placed to take it through its next stage of development in improving its efficiency and performance.
The net proceeds of the disposal will be used to reduce the group’s net borrowings.
Philip de Klerk, group chief executive, comments: “We are pleased to announce the disposal of the Construction Fibres business as part of our strategy to simplify our portfolio and to improve our core business. We have found a very good buyer, who will be able to further grow and develop this business. We are also progressing well with the disposal needlepunched nonwoven business and are seeking to conclude a full disposal of the Civil Engineering division during the current year.”