SGL Group sells subsidiary Hitco Carbon to Avcorp


SGL Group has sold its subsidiary Hitco Carbon Composites, which manufactures composite structural parts for commercial and military aerostructures to Canada based Avcorp Industries Inc.

“The deal includes all inventories, equipment, tooling and other fixed assets, intellectual property, contractual rights, good will, accounts receivable, and work in progress,” a SGL press release said.

The terms have resulted in overall negative proceeds of $ 47 million, from payments to Avcorp, repayments of customer advance payments as well as costs relating to various services to benefit Avcorp.

“The purchase consideration is subject to customary adjustments based on working capital of Hitco and certain contract pricing adjustments,” SGL added.

This leads to an impairment charge in the range of €50-55 million on the Hitco assets held for sale recorded under discontinued operations in the income statement.

The related cash outflow amounts to approximately €40 million, of which the larger part will be payable on closing.

The cash outflow related to the sale of the commercial business of HITCO was not included in the Company’s free cash flow guidance from continued operations and will be recorded in the free cash flow from discontinued operations.

According to SGL Group, the transaction is subject to customary closing conditions and is expected to be closed at the latest by October 16, 2015.

The agreement on the sale of the HITCO’s aerostructures business will have an impact SGL’s financials for the first half of 2015 as well as for the full year 2015.

A further non-recurring item impacting the financials relates to SGL’s tax liabilities in conjunction with tax audits.

The related cash outflow amounts to approximately €35 million in 2015 compared to existing tax provisions of €41 million.

“This development does not materially impact the Group’s guidance for free cash flow from continuing operations,” it informed.

In the first half of 2015, SGL Group sales amounted to €655 million, EBITDA before non-recurring items to €61 million, EBIT before non-recurring items to €15 million and net debt as of June 30, 2015, to €523 million.

SGL Group noted that it adheres to its full year 2015 guidance of a substantially improved EBITDA and EBIT compared to 2014.

Due to subdued order intake activity in the first half of the year, it expects the EBIT of the business unit GMS in the full year 2015 to remain below the 2014 level.

“This, however, will be compensated by a better than anticipated performance in the business unit CFM,” SGL Group observed.

SGL Group is a manufacturer of carbon-based products and materials and has a comprehensive portfolio ranging from carbon and graphite products to carbon fibres and composites.

With 42 production sites in Europe, North America and Asia as well as a service network covering more than 100 countries, SGL Group reported revenues of €1,336 million in 2014. (AR)

Source: Free Textile and Fashion Industry News RSS XML Feeds – Fibre2fashion