Ceramco Seeks Shareholder Support For Change
Ceramco Seeks Shareholder Support For Dynamic Change In Statigic Focus
Ceramco Corporation Limited is to ask its shareholders to endorse a dynamic change of strategic focus which would see the company exit its china clays business and aggressively grow the Australasian and European business of its Bendon subsidiary.
"Bendon dominates the New Zealand market, and we're moving to that position in Australia," said Ceramco Chairman Ian Parton. "Our strategy is to expand markets in Australia and move into Europe. We will further increase market access through the development of e- commerce opportunities."
Expansion will take place over the next three years. Bendon is forecasting operating EBIT earnings of $6.2 million for the year ended March 2000, with projected operating EBIT earnings reaching $7.9 million in 2001, before costs associated with expansion.
"We see this move as a re-focussing of our activities. It recognises opportunities in the intimate apparel markets, and acknowledges our exit from the ceramics industry through the pending sale of New Zealand China Clays Limited.
"Globalisation of clay and minerals markets has created large, international companies which can dominate our markets. As a small niche player, we are finding it more difficult to compete. We are vulnerable on price, and face a steady slide towards marginalisation," Mr Parton said.
As a result, the board is seeking shareholder approval for the sale of New Zealand China Clays Limited to Mircal, a subsidiary of French industrial mineral company Imerys, for $41 million.
"This offer represents an excellent opportunity for Ceramco and its shareholders. Not only does it unlock the value of New Zealand China Clays, it exceeds the fair value range established independently by Deloitte Corporate Finance."
If the sale of the china clays business is endorsed by shareholders on the 1st of June, then Ceramco will also seek approval to cancel 1 in 4 of its shares and return $16.1 million in capital to shareholders. $9 million will be applied to the cost of liquidating its residual structure of 41 companies, and their various liabilities, over the next two years. Further funds will be returned to shareholders as soon as practicable, and in the most tax efficient manner.
Reporters wanting full background material and copies of notes to shareholders should call Eugene Shepherd at Ceramco on (09) 273- 0850; (025) 291-9245.