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.'