Low & Bonar seals £5.6m sale

Low & Bonar, the specialist materials group with Dundee roots, has sealed a deal to sell its construction fibres business for £5.6 million.

The operation has been bought by Adfil NV and Industria BV. Adfil, which will purchase the business and pro - duction assets, is owned by a private Belgian investor. Industria BV, which will purchase the construction fibres factor y site, is owned by parties connected with Adfil NV.

Low & Bonar stressed that under the terms of the agreement, all employees will transfer with the business and no redundancies are anticipated.

In the year ended 30 November 2018, the construction fibres business recorded a loss of about £1.6m, but the group noted that its civil engineering arm, which includes construction fibres, had performed more strongly in 2019. As a result, management had been expecting construction fibres to make a “modest profit contribution” to the business in the year to 30 November 2019.

The net proceeds of the disposal will be used to reduce the group’ s net borrowings. The civil engineering division as a whole will be presented as a discontinued operation and its assets held for sale in the group’s 2019 half-year financial results.

Chief executive Philip de Klerk said: “We are pleased to announce the disposal of the construction fibres business as part of our strategy to simplify our portfolio and to improve our core business. We have found a very good buyer, who will be able to further grow and develop this business.”

Last month, Low & Bonar announced the departure of its chief executive while warning that the trade dispute between the US and China was hurting sales.

De Klerk will step down from the top job and leave the board at the start of July, with nonexecutive chairman Daniel Dayan assuming the role of executive chairman on 2 July.