Disposal Discussions - Machine Tool Business
In line with the Board’s strategy to focus the Group on the core activities of the manufacture and sale of industrial chains, gears and couplings, the Board is pleased to announce that it is in advanced discussions regarding the disposal of the Group's Machine Tool business.
Renold is at an advanced stage of negotiations with Venture Private Equity (“VPE”) whereby companies established by VPE will acquire the business and certain assets of the Machine Tool business, and the appropriate employee consultation process is about to commence.
The Board announced on 6 June 2006 that it is in separate discussions concerning the potential disposal of the Group's Automotive business. It is intended that proceeds from both potential divestments will be used to reduce Group debt.
As a consequence of these ongoing discussions, it is now anticipated that the Group's preliminary results for the year ended 31 March 2006 will be announced in mid July. The Board expects that improved second half performance across the entire Group including Automotive and Machine Tools will result in underlying operating profits being towards the upper end of current market expectations. An update on current trading will be given when the preliminary results are announced.
The Board of Renold will make further announcements regarding the progress of these potential disposals as soon as it is appropriate.