Business
Disposal
Disposal.
About this update from European Metals Holdings Ltd
[{"type":"text","content":"\n European Motor Hldgs PLC\n17 January 2006\n\n\nEUROPEAN MOTOR HOLDINGS plc (\"EMH\")\n\nDISPOSAL\n\nAt the time of the acquisition of Smith Knight Fay (Holdings) Limited (\"SKF\") on\n1 July 2005, we announced that EMH was the subject of a review by Toyota and\nLexus to assess the enlarged group's candidacy for those franchises and that\napproval had been given for SKF to continue to operate the franchises in the\nintervening period. The assessment procedures were successful and EMH was\napproved as a partner for both franchises and looks forward to having the\nopportunity to work with them in the future. However, following discussions\nwith the manufacturers, it has been agreed to dispose of the existing Toyota and\nLexus franchises in line with those manufacturers' market area arrangements.\nSKF's Mazda business shares a property with the Lexus business and EMH has\ntherefore decided to dispose of the Mazda business at the same time.\n\nAccordingly, on 16 January 2006 the group disposed of the business and certain\nassets of SKF's three Toyota businesses, one Lexus business and one Mazda\nbusiness to RRG Group Limited (\"RRG\"). The businesses disposed of operate in\nthe South Manchester area (Stockport, Denton and Macclesfield). RRG already\noperates other Toyota and Lexus franchises in the North Manchester area. The\ntotal consideration for this transaction was £13.2 million, which has been\nsettled in cash, and the gross assets disposed of amounted to £12.5 million.\nThe assets disposed of include three freehold properties from which the Toyota\nbusinesses operate. The Lexus and Mazda businesses operate from a site which\nforms part of a larger freehold property which is also used by other SKF\nbusinesses. SKF has therefore leased the Lexus/Mazda site to RRG for a minimum\nof seven years and a maximum of twenty years at an initial annual rent of\n£330,000.\n\nSKF accounts for borrowings and interest centrally and historically only\nproduced accounts for individual businesses to operating profit level. In the\nyear ended 31 May 2004 (the latest period for which audited accounts are\navailable) the businesses disposed of made a contribution to SKF's operating\nprofits of £1.4 million. Management accounts for the thirteen months ended 30\nJune 2005 indicate that the businesses made a contribution to SKF operating\nprofi...