4th Jul 2019 11:31
(Alliance News) - Carclo PLC on Thursday said it has received offers for its Wipac business, which is currently being restructured, and will likely incur write-downs.
Shares in Carclo were up 5.0% at 20.22 pence in late morning trade.
The company also announced the departure of its Chief Financial Officer Sarah Matthews-DeMers, who is joining automotive industry-focused testing firm AB Dynamics PLC in the same role.
AB Dynamics, in a separate statement, said Matthews-DeMers will join as chief financial officer from November 4.
Carclo said it will begin searching for a replacement for Matthews-DeMers "shortly". The technical plastics supplier is still looking for a permanent CEO, though Chair Mark Rollins has been filling the role on a temporary basis since January.
Wipac, Carclo's main operating business in its LED Technologies division, is expected to report a non-cash write down of project assets due to restructuring. Carclo said Wipac is looking to refocus on previously successful "low-volume high-end vehicle markets".
"This strategy is likely to result in a non-cash write down of some project assets in the accounts for the year ending 31 March 2019 and work is currently ongoing to quantify the amount of the write down," Carclo said.
Wipac is "incurring significant losses" and Carclo said it has been approached regarding a possible acquisition of the business. At present, talks are still in their early stages.
Furthermore, Carclo is still in talks to extend its borrowing facilities, due to mature Msrch 2020. In the past week, Carclo has received EUR8.7 million in "outstanding tooling balances from its customers", which Carclo has spent on paying its suppliers and funding its GBP2.0 million short-term overdraft.
Given these discussions are still ongoing, Carclo's March net debt to earnings before interest, depreciation, taxation, and amortisation banking covenant tests has been delayed once again until the end of July.
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