Tag Archives: London Stock Exchange

Ennstone Thistle and other subsidiaries sold as going concerns as Ennstone Group goes into administration

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Ennstone Group has announced that it has sold its UK and Polish subsidiaries – to Breedon Holdings Ltd, a company backed by Barclays Ventures and a number of other financial institutions. The sale – for an undisclosed amout,  is not expected to result in any return to shareholders.

However, since the subsidiaries were understood to be trading steadily, their sale as going concerns to a stable buyer is good news for Argyll. It will be welcomed in the communities of Benderloch, Bonawe, Dunbeg and Furnace where Ennstone Thistle operates local quarries.

The sell-offs were made following the appointment as Joint Administrators for Ennstone Group of business restructuring partners, Nick Dargan and Matthew Cowlishaw of Deloitte LLP. This was done on 9th March.

At the same time the company applied to the UKLA and London Stock Exchange to cancel Ennstone plc’s listing on the London Stock Exchange with immediate effect.

The Group’s UK banking syndicate had maintained its support for the company as it struggled over the past eight months to to achieve a solvent restructuring through asset sales and attemnpts to raise new equity.

The deteriorating market conditions defeated its restructuring efforts, making its descent into administration and Stock Market delisting inevitable.

The Board of Ennstone plc have now said: ‘The Group has been facing the most challenging economic conditions for decades which have reduced operational performance. These conditions have also prevented the Group from raising the further financing it needed or from realising disposals at prices which could have resoved the Group’s financial problems. The sale of the UK and Polish subsidiaries has secured the jobs of over 1,000 of the Group’s employees’.

Matthew Cowlishaw, Joint Administrator, says: ‘The slowdown in the house building and infrastructure sectors along with the lack of funding for potential acquirers has played a significant role in the Group’s difficulties. Securing a going concern sale of the UK and Polish subsidiaries, whihc will protect over 1,000 jobs, is positive news for the employees and the industry as a whole’.

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.