Tag Archives: Ennstone Inc

Now Ennstone’s wholly-owned American subsidiary files for protection under Bankruptcy Code

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Ennstone Group has just announced that the Board of Ennstone plc was informed today (25th February) by the directors of Ennstone Inc, the Group’s wholly-owned US subsidiary, that Ennstone Inc has now filed for protection from its creditors. This has been done under Chapter 11 of the United States Code (the ‘Bankruptcy Code’). The affairs of Ennstone Inc will therefore now be managed in accordance with the provisions of the Bankruptcy Code.

Although the holding company of the group, Ennstone plc, has some contingent liabilities in relation to the business of Ennstone Inc, neither of the Group’s UK nor Polish businesses – Ennstone Johnston and Ennstone Thistle with its Polish subsidiary Ennstone Sp. z o.o – have any such liabilities or any trading relationship with the Group’s US operations. Both of these businesses continue to operate normally and to perform satisfactorily in the difficult trading environment.

These operations are expected to have sufficient cash headroom through to the end of March 2009, on the basis of the continuing support of their UK and Polish lenders and finance lease providers.

The Group continues to work towards an agreed restructuring with its UK lenders within a timeframe expected to secure the future of the UK and Polish trading companies.

Ennstone Group will make a further announcement in due course.

Ennstone Group sell more US assets

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The Ennstone Group, whose Scottish subsidiary, Ennstone Thistle, operates four Argyll quarries (at Benderloch, Bonawe, Dunbeg and Furnace), has now sold more of its assets in the USA. The company’s shares were suspended on the London Stock Exchange on 28th January. It has now said that Ennstone Inc, its American company, sold the trade and assets of its ready mixed concrete businesses located in Charlottesville and Elkton, Virginia, to Wilson Ready Mix LLC for US$3.1 million in cash on 20th February.

Following this sale, Ennstone Inc. will be required to repay approximately US$0.95 million of outstanding Industrial Revenue Bonds and finance leases related to certain of the Assets.

At 31st December 2008, the assets now sold had a net book value of US$4.6 million. In the financial year ended 31st December 2008, these assets generated a loss of US$0.55 million. Ennstone Inc. is understood to be currently negotiating with its US lenders as to how the proceeds of this asset sale, which will be retained in the US, will be applied.

The news gets grimmer for Argyll’s four Ennstone quarries

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The Ennstone Group has just (28th January) announced that it has today asked for a suspension of the trading of its shares on the London stock exchange – with immediate effect.

In the USA, Ennstone Group’s cash position is still critical. Its US subsidiary, Ennstone Inc., has now suspended payments of interest charges and finance lease repayments to its US lenders. The Group says that discussions with these lenders are continuing and proposals have been made which may result in a solvent solution in that country. This though depends on the response of the US lenders who are still considering the proposals put to them. Should they either reject the proposals or fail to come to a decision by the end of January 2009, Ennstone, Inc.’s liquidity position will become critical.

On 19th December 2008, Ennstone Group announced that it was continuing to negotiate on proposals which it had received for the sale of the Group as a whole – or for a substantial cluster of its UK businesses. These proposals involved a significant equity investment and a refinancing of the Group.

However, the group says that recent developments indicate that there is now a diminished likelihood of it successfully concluding a solvent proposal for Ennstone plc and for the Group as a whole.

It emphasises that it is continuing to manage its cash position rigorously and has made a number of disposals, all reported by For Argyll,  of non-core assets which have provided additional short-term working capital in both the UK and US.

Ennstone reports that its UK lenders remain supportive of the UK businesses and that discussions are continuing to seek a solvent solution for Ennstone’s UK and Polish subsidiaries. This is expected to be announced in the near future and this is the announcement that will impact upon the position of the Argyll quarries.

The Ennstone Group Board believes that it has sufficient liquidity to the end of March 2009 provided that its UK lenders maintain and develop their current facilities. This would also depend upon the continuing support of the Group’s lease finance providers and other stakeholders.

The Group’s UK businesses, Ennstone Johnston and Ennstone Thistle – operator of Argyll’s four quarries at Furnace, Dunbeg, Benderloch and Bonawe – and its Polish subsidiary Ennstone Sp. z o.o., have continued to perform satisfactorily in the current economic downturn.

The Board anticipates that they would be in a position to continue to continue to trade satisfactorily following any required restructuring of the Group.

The Group’s decision to ask for the suspension of its shares from London Stock Exchange trading is a result of the need for space for clarification of any potential transaction and of the Company’s financial position.

The group will make a further announcement in due course but the nail biting at the Argyll quarries continues.

Ennstone disposals continue

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The Ennstone Group is continuing its asset disposals. It has announced that its wholly owned subsidiary, Ennstone Inc., has agreed the sale of its wharf facility in Pittsburgh, Pennsylvania to West Penn Aggregates Inc. West Penn Aggregates will pay, on completion, $1.73 million cash.  Completion of the transaction is conditional on Ennstone Inc.’s lenders releasing their security interest over the wharf facility.

Ennstone anticipates that the sale will be completed by 26th January 2009. The Group will then be required to repay approximately $0.21 million of outstanding finance leases of parts of the property concerned. On 31st December 2008, the property had a net book value of $1.95 million and had generated a loss of $0.66 million in the financial year which ended on that date.

Ennstone Inc. is currently negotiating with its US lenders on how the proceeds of the sale – which will be retained in the US – will be applied.

Ennstone Group is continuing to seek and negotiate on either a refinancing or an offer for the Company. However, it concedes that its financing situation remains critical and there can be no certainty of a satisfactory outcome.

This means that the four Argyll quarries – at Furnace, Dunbeg, Benderloch and Bonawe, operated by the Group’s Scottish subsidiary, Ennstone Thistle, will have to continue to hold their breath.