Coats to take loss on 'difficult' sale of EMEA Crafts unit

Coats to take loss on 'difficult' sale of EMEA Crafts unit

By Jonathan Underhill

July 29 (BusinessDesk) - Coats Group, the company that grew out of diversified investor Guinness Peat Group, says the sale of its EMEA Crafts business to Aurelius Group will be completed on Friday although the loss on sale won't be announced until its first-half results, due on Aug. 3.

The UK-based threadmaker first announced the sale of its Europe, Middle East, and Asia crafts unit for US$10 million on Feb. 19. Today it described the sale as "a complex, multi-jurisdictional transaction" which had been completed "against a backdrop of increasingly poor market conditions which have affected the trading performance of EMEA Crafts."

"Accordingly, Coats has agreed to a nominal final consideration payable to Coats compared to an original consideration of US$10 million," it said in a statement. "An amount of cash, broadly in line with the original terms of the sale, will be retained within the business being sold, which will result in the transaction being cash negative. The precise quantum of the loss on disposal will be determined on completion and reported in the 2015 full year results."

The EMEA Crafts business would be listed as a discontinued item in the first-half results, it said.

In February, chief executive Paul Forman said the sale "better positions Coats for future profitable growth and allows us to focus management attention on our high performing global industrial and strong Americas crafts businesses."

The shares last traded at 60.5 cents on the NZX.

(BusinessDesk)

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