ASSOCIATED BRITISH ENGINEERING PLC
4 October 1999
Associated British Engineering Plc ('ABE' or the Company') announces that it
has agreed to sell its entire interest in the share capital of M/s Danway LLC,
its Middle East business centred in Dubai in the United Arab Emirates for 35
million United Arab Emirates Dirhams ('Dhs'), representing approximately £5.8
million. This price represents approximately the net asset value. A Sale and
Purchase Agreement has been signed and the sale proceeds have been transferred
into an escrow account at the HSBC Bank in Abu Dhabi. The sale proceeds will
be transferred into the Company's bank account following (1) approval of the
sale by the Regulatory Authorities in the United Arab Emirates; and (2)
approval by the Company's shareholders at an extraordinary general meeting of
the Company.
Danway is an electrical engineering and contracting business whose main
operations include the manufacture of process control and motor control panels
and assembly of packaged pumpsets. In the year ended 31st March 1999, Danway
had a profit before taxation on ordinary activities of 7.1 million Dhs which
equated at that time to approximately £1.2 million. The net assets as at 31
March 1999 being disposed of amount to approximately 34.5 million Dhs.
The net sale proceeds will be utilised inter alia to repay all the short term
borrowings remaining in the Group of approximately £3.6 million thus reducing
interest payments and to provide additional working capital.
A Circular incorporating a notice of Extraordinary General Meeting (at which
approval will be sought for the proposed sale) will be dispatched to
shareholders in early course.