Corporate advisers have been appointed to jumpstart the search for a strategic buyer or investor for its subsidiary FLS Aerospace, writes Arthur Beesley
The Danish owners of the former TEAM Aer Lingus plant at Dublin Airport have renewed their efforts to sell the struggling aircraft maintenance business.
The FLS Industries conglomerate appointed corporate finance advisers in recent weeks to jump-start the search for a strategic investor or buyer for its subsidiary, FLS Aerospace, which acquired TEAM five years ago.
The group's Copenhagen-based communications vice-president, Mr Torben Seemann-Hansen, said FLS wanted to be in a position to make an announcement before the end of the year. He said: "In the long term we have decided that we are not the best sole owner for FLS Aerospace."
Some 1,600 people are employed in Dublin in a business which also operates in Britain, Denmark, Spain and Sweden. In a presentation to analysts last September, FLS Industries said FLS Aerospace had traditionally been a "value destroyer" in the group.
With the aircraft business no longer regarded as a core operation in FLS Industries, it is thought the group will attempt to sell all of FLS Aerospace or persuade another investor to come on board. The business was offered for sale some time ago and while it was never formally taken off the market, the recruitment of advisers suggests that activity will intensify soon. Full-year financial results are expected early in March. While the group is now in a closed period, FLS Industries forecast before Christmas that FLS Aerospace would turn a loss before interest and tax slightly lower than its loss of €15.6 million in 2001.
The latest official results show a €12.1 million loss before interest and tax in the first nine months last year, contrasting with a positive earnings of €22.05 million before interest and tax in the same three quarters in 2001.
While stating late last year that the Dublin base was performing satisfactorily, the company's overall operations lost €11.43 million in cash in the third quarter.
Efforts to restart the sale or investment process follow the collapse of an agreement by the US group United Technologies Corporation to acquire FLS Aerospace soon after the events on September 11th, 2001.
FLS never formally confirmed United Technologies' interest in the company but Mr Seemann-Hansen said he "wouldn't count out any options or scenarios" when asked whether attempts might be made to revise the proposed deal. Singapore Airlines, which is known to have been in the frame in 2001, is considered likely to be approached.
Mr Seemann-Hansen said FLS Aerospace required "significant" investment to redirect its focus towards the budget airline market.
This part of the industry has boomed despite the slump among national carriers since late 2001. While declining to specify the amount of money required to purchase components and spare parts, he said FLS Industries would not provide the money.
The latest quarterly results from FLS stated that the company's "traditionally profitable" component business was performing satisfactorily, but added that components were being leased for shorter periods "due to customers' rising cost consciousness".
FLS Aerospace was not listed as a core business in a presentation to Danish analysts last week, which stated that it was concentrating engineering and building material operations as two core activities.
While Mr Seemann-Hansen said the FLS board decided in February last year that FLS Aerospace business was no longer core, a presentation to analysts last June listed aircraft maintenance as one of three core business areas in which the group was active.
FLS Industries is in restructuring after a "drastic turnaround process". The group's controlling shareholders have indicated they want to sell out of the business altogether.
