21st Jan 2014 08:26
LONDON (Alliance News) - Engineering firm Melrose Industries PLC said Tuesday that it plans to use part of the net proceeds from certain disposals to return about GBP600 million in cash to shareholders.
The cash return represents a proposed return of 47 pence per existing ordinary share. The company said the balance of the net proceeds has been used to pay down existing borrowings.
During the second-half, Melrose said that it completed disposals of five of its 'FKI' businesses for around GBP945 million, more than tripling shareholder value in five years of ownership, it said.
As previously announced, Melrose said it intends to use part of the net proceeds of these business disposals to return GBP600 million in cash to shareholders as part of its "buy, improve, sell" strategy it have adopted since inception, and that its remain, "well positioned to create superior shareholder value going forward."
Melrose added that it would give Shareholders a choice to receive their proceeds in a form of either income or capital.
Associated with the Return of Capital, there will be a one-off ordinary Share Capital Consolidation in the ratio of 11 for 13, the company said.
Christopher Miller, Chairman of Melrose, said, "Today's announcement marks another milestone in Melrose's "buy, improve, sell" strategy. 2013 was a momentous year in which we crystallised more than three times the original shareholder value in five of the 'FKI' businesses acquired in 2008. We continue to own Bridon and Brush which constituted approximately half of the value of the original FKI acquisition.
"Returning the value we realise to our shareholders has been a fundamental part of our strategy since Melrose was founded ten years ago," he added.
Shares in Melrose were trading up 0.49% at 313.2403 pence per share Tuesday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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