Business
Disposal
Disposal.
About this update from Airea Plc
[{"type":"text","content":"\n Sirdar PLC\n05 November 2007\n\n\nSirdar PLC ('Sirdar' or 'the Group')\n\n5 November 2007\n\nDisposal\n\nThe directors of Sirdar ('the Directors') are pleased to announce the sale of\nSirdar Spinning Limited ('Sirdar Spinning') to Sirdar Holdings Limited (the\n'Purchaser'), a company controlled by Russell Morris and Ian Stead, both of whom\nare currently directors of Sirdar Spinning (the 'Disposal'). Sirdar Spinning\ncompromises the whole of the Group's Specialist Yarns division. Further details\nof the Disposal are set out below:\n\nActivities of Sirdar Spinning\n\nSirdar Spinning is involved in the marketing and distribution of hand knitting\nand industrial knitting yarns and the manufacturing, marketing and distribution\nof technical products.\n\nReason for the disposal of Sirdar Spinning\n\nIn the Interim Report released in March 2007, the Directors stated their\nintention to focus on the Group's core activity of floor coverings and to\nrationalise its property portfolio. The disposal of Bective Mills, Wakefield and\nEnsor Mill, Rochdale was completed in July 2007 for gross proceeds of £16.25\nmillion. The Disposal represents a further significant step in the\nimplementation of that strategy.\n\nThe performance of Sirdar Spinning has been subject to significant fluctuations\nin recent years and in particular, the Directors are of the view that, the\nmarket for hand knitting yarns is subject to changes in fashion. For these\nreasons, the Directors believe that the needs of Sirdar Spinning would be better\nserved under different ownership and therefore consider that the Disposal is in\nthe best interests of the Group.\n\nDeal structure\n\nSirdar will receive an initial consideration of £2.5 million, a deferred\nconsideration of £300,000 (to be satisfied by the issue of loan notes by the\nPurchaser), and an earn-out of up to a maximum of £500,000, for the sale of\nSirdar Spinning. The earn-out is dependant upon Sirdar Spinning achieving an\nagreed level of EBITA in the years to 30 June 2008 and 30 June 2009.\n\nThe agreement relating to the Disposal contains a requirement for Sirdar to\nchange its name within three months of the date of the Disposal. This will\nrequire the convening of an extraordinary general meeting of shareholders and\nmore details of this will be announced in the near future.\n\nFinancial information...