Business
Subsid's Disposal
Subsid's Disposal.
About this update from Synectics Plc
[{"type":"text","content":"\n Quadrant Group PLC\n11 August 2000\n\n Quadrant Group plc\n \n\nQuadrant Group plc ('Quadrant') announces that its subsidiary\nQuadrant Video Systems plc ('QVS') has reached conditional\nagreement for the disposal of QVS' audio visual equipment\nsystems and services business ('the AV Business') to members\nof the AV Business' management team ('the Purchasers').\n\nThe AV Business was transferred into a subsidiary company,\nQuadrant Visual Solutions Limited ('VSL') with effect from 1\nJune 2000, and QVS is now selling 80.65% of the issued share\ncapital of VSL for £100,000, which is approximately equal to\nthe current net asset value attributable to these shares. In\naddition, VSL has issued to QVS £200,000 of 7% secured loan\nnotes (repayable over 5 to 7 years) and will retain an amount\nof debt at completion estimated to be £500,000. Following the\ndisposal, QVS will retain a 19.35% share holding in VSL, which\nthe Purchasers will have the option to acquire at fair value\nin certain circumstances. The proceeds of the disposal will be\nused to provide additional funds for the Group's working\ncapital requirements.\n\nBecause one of the Purchasers, Mr Paul Gregory, is a director\nof QVS, the disposal is conditional on approval by Quadrant's\nshareholders. A circular setting out full details of the\nproposed transaction and giving notice of an extraordinary\ngeneral meeting of shareholders will be posted shortly.\n\nIn the year to 31 May 1999, the AV Business made an operating\nloss of £281,000 on sales of £6.1 million, and in the half\nyear to 30 November 1999 made an operating loss of £78,000 on\nsales of £2.8 million.\n\nIncluding the effect of asset write-downs in QVS, which have\nno cash impact, the proposed disposal is expected to generate\na loss on disposal of approximately £450,000 (including costs)\nwithin Quadrant's consolidated accounts.\n\nDavid Coghlan, Chief Executive of Quadrant, said\n\n'As set out in the Company's recent annual reports, the\nperformance of the AV Business has been unsatisfactory for\nsome time. Whilst major restructuring has considerably\nimproved its position and prospects, the AV Business has\ncontinued to divert management attention from the profitable\nCCTV security core business within QVS. The Board believes\nthat this transaction will allow Quadrant to capitalise more\nrapidly on the po...