Monday, October 8, 2012


Compared with the upbeat last post (Sept 95) this one suggests all may not be well in the accounts dept.

A management buy-out team has purchased Courtaulds' Amtico luxury vinyl flooring unit for £49m cash. Courtaulds will keep a 10% stake in the business and may receive a further £3.8m if certain performance targets are met. This sell-off coincides with Courtaulds' strategy of focusing on fibres and coatings. The company has received shareholders' approval for its oriented polypropylene film joint venture with Hoechst. Proceeds from the sale and the joint venture are to be used to reduce debt, which would reduce gearing from 53% to 40% and give the group room to finance the capital investment needed to develop Tencel, its new fibre. 

Harverson P., Financ. Times, no. 32,865, 22 Dec. 1995, p. 20

Maybe the Tencel development was straining Group finances at this time.  Amtico seemed to be just the sort of high quality, high value brand Courtaulds needed to grow, and PP film in 96 looked better in the medium term than Cellophane.

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