In its fight to survive in the current recession, Ennstone Group have just announced that Mr. Eric Gadsden has informed the Board of his decision to resign as a non-executive director of Ennstone with immediate effect.
Ennstone Group’s susidiary, Ennstone Thistle – itself trading with no great difficulty – operates four Argyll quarries with a vested interest in the health of the parent company.
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.
Ennstone Group has announced that the discussions it has been engaged in over a possible offer for the Group have been terminated and that the Group is consequentlty no longer in an offer period. This development sees one of the Group’s options closed down. For Argyll is keeping a watching brief on this situation and will report when there is more news.
The hope for Argyll is that the Group’s subsidiary, Ennstone Thistle, operator of its four Argyll quarries at Benderloch, Bonawe, Dunbeg and Furnace, is said to be in a good trading position.
Ennstone Group have announced that Mark Elliott has resigned as a Director on the Board of the Company with immediate effect but will continue in his role as President of the Company’s US subsidiary, Ennstone, Inc.
This news should be read alongside the series of articles For Argyll has published on the continuing troubles of the Ennstone Group. Entering ‘Ennstone’ in the Search on this page will bring access to previous news items.
Argyll has a particular interest in the struggles of the Group as its Scottish subsidiary, Ennstone Thistle operates four Argyll quarries – at Furnace, Dunbeg, Benderloch and Bonawe.
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.
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.
The Board of the troubled Ennstone Group, operator of four Argyll quarries – at Furnace, Dunbeg, Benderloch and Bonawe – have this morning (5th January 2009) announced that Julian Cooper has joined the Board with immediate effect as Executive Chairman.
Mr Cooper is a Chartered Accountant and brings to the Board his considerable experience in a variety of executive management positions. He is a senior partner of consultants, MPC Partners LLP and is a former partner at Arthur Andersen. This was once one of the Big Five international accountancy firms until its collapse in 2002, mired in the Enron financial scandal in the USA.
Julian Cooper succeeds Graham Brown who will remain on the Board as a non-executive Director, ensuring a smooth transition. The Board of Enstone Group wish to thank Mr Brown for his service to the Group as Interim Executive Chairman.
The coming days and weeks will be critical to Ennstone in its admitted difficulties, as For Argyll has reported, so Mr Cooper joins at a time when all of his skills and experience will be immediately needed. It is in Argyll’s interests that he succeeds.
Ennstone today (29th December) announced, without explanation, the resignation of non-executive director, Tim Ross from the Board of Ennstone Group, to take effect from 31st December 2008.
For Argyll has regularly covered recent developments in Ennstone’s situation which are of concern in Argyll. The Groups Scottish wing, Ennstone Thistle, operates four Argyll quarries – in Furnace, Dunbeg, Benderloch and Bonawe.
The Group recently sold off a major asset – its Concrete Products business – without making any significant improvement to its trading position and admits that January 2009 will be a testing time.
A pressing need for traditional materials to re-slate thousands of houses in Edinburgh, Glasgow and elsewhere has led to Historic Scotland commissioning a study on reopening Argyll’s Ballachulish slate quarries. The report into the viability of resuming the slate mining will be published shortly. In 1955 The Glasgow Herald reported, because of ‘continuous losses’, the then 250 year-old quarries were to be closed temporarily’ and the last 23 workers laid off. It’s been a long lay-off. Commercial interests, recognising the imminent need over the next decade for the re-roofing of areas such as Edinburgh’s New Town, are urging the reopening. Graeme Millar, of long-established Peebles family firm, Bain and Irvine, said ‘I think there are 8,000 – 9,000 roofs in Edinburgh alone that need re-slating in the next ten years. The figure for all of Scotland is going to be, well, it’s going to be high’.
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