Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Cavalier to sell scouring interest, focus on carpets

By Gavin Evans

Sept. 27 (BusinessDesk) - Cavalier Corp is close to selling its stake in New Zealand’s only wool scourer as part of a plan to reduce debt and free up capital to invest in carpet manufacturing.

The firm owns 27.5 percent of Cavalier Wool Holdings, alongside global giant Lempriere Wool, Accident Compensation Corp and Direct Capital. The scourer, known as CWH, operates plants in Napier and Timaru with a combined capacity of 100 million kilograms annually.

Cavalier said it will receive about $13.5 million in cash from the sale. The transaction will also result in a non-cash write-down of almost $12 million on its equity in CWH and its half stake in a property company with leases to the scouring business.

Chief executive Paul Alston said the firm was approached by an experienced investor in wool scouring and its partners had all agreed to accept the offer. Lempriere-owned Scouring Investments will retain a 30 percent stake.

Cavalier will also enter into a long-term agreement with CWH to ensure ongoing access to scouring services on arm’s length commercial terms.

“We do not believe it is essential to own scouring infrastructure to secure the supply of scoured wool,” Alston said. “The sale proceeds will significantly reduce our debt and strengthen our balance sheet, enabling us to explore investments in our core business of manufacturing and marketing high-end carpet solutions.”

Cavalier, which has sales offices throughout New Zealand and Australia, has halved its debt in the past four years. It undertook a major consolidation of its manufacturing plants in 2016 to improve profitability and is ramping up its export focus to expand significantly beyond Australasia.

Its operating earnings climbed to $10.3 million in the June year, from a $2.2 million loss the year before when the firm incurred $6.3 million of restructuring costs. Debt at June 30 was $29.4 million, down from $40.2 million a year earlier.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Fuels Rushing In: Govt "Ready To Act" On Petrol Market Report

The Government will now take the Commerce Commission’s recommendations to Cabinet...
• A more transparent wholesale pricing regime • Greater contractual freedoms and fairer terms • Introducing an enforceable industry code of conduct • Improve transparency of premium grade fuel pricing... More>>

ALSO:

Reserve Bank Capital Review Decision: Increased Bank Capital Requirements

Governor Adrian Orr said the decisions to increase capital requirements are about making the banking system safer for all New Zealanders, and will ensure bank owners have a meaningful stake in their businesses. More>>

ALSO:

Aerospace: Christchurch Plan To Be NZ's Testbed

Christchurch aims to be at the centre of New Zealand’s burgeoning aerospace sector by 2025, according to the city’s aerospace strategic plan. More>>

ALSO:

EPA: Spill Sees Abatement Notice Served For Tamarind Taranaki

The notice was issued after a “sheen” on the sea surface was reported to regulators on Thursday 21 November, approximately 400 metres from the FPSO Umuroa. A survey commissioned by Tamarind has subsequently detected damage to the flowline connecting the Umuroa to the Tui 2H well. More>>

Taskforce Report: Changes Recommended For Winter Grazing

A Taskforce has made 11 recommendations to improve animal welfare in intensive winter grazing farm systems, the Minister of Agriculture Damien O’Connor confirmed today. More>>

ALSO: