The Jones Group has conditionally agreed the sale of companies in its distribution division to a consortium led by its senior management for £10.4 million (#13.21 million). It has also agreed the sale of its 63 per cent shareholding in Blugas to Bord na Mona subsidiary, Suttons and the Richmond Group for £1.65 million (#2.1 million).
The transactions will yield net cash of £10.2 million for shareholders, Jones said yesterday. The deal is subject to shareholder approval and must also be sanctioned by the Minister for Enterprise, Trade and Employment, Ms Harney, under the Mergers and Take-overs (Control) Acts.
The management-buy-out is being led by Jones chief executive, Mr Pat Nevin, and is backed by ICC Bank.
The Jones management team will take a 65 per cent stake in the new company, Jones Distribution. ICC Bank will hold the remaining 35 per cent of the equity. The oil companies to be sold are involved in the distribution of fuel and lubricant products to the domestic and commercial heating, agriculture and marine markets. Blugas distributes liquid petroleum gas in Ireland. The consideration of £1.65 million compares with a net book value for Jones's 63 per cent stake in Blugas of approximately £3.1 million at the end of June 1998. This will result in a net loss on its disposal of approximately £1.5 million.
The £1.4 million debt in Blugas will remain in that company and will no longer be consolidated in the Jones Group. As a result, the net cash impact of the transaction for shareholders will be £3.1 million. As Bord na Mona and Richmond do not have other significant LPG interests, it is not certain that they intend to hold Blugas in the long term.
The monies raised from the transactions, together with the group's net cash balances, will be held on deposit until the proceeds are distributed to shareholders. The initial cash distribution is expected to be announced within the next three months.
There are currently 5.2 million Jones 11p ordinary shares in issue. The major shareholders are Zehnder Holding AG (21 per cent), AIB (19 per cent), Jonestaff Society (8.4 per cent), Friends Provident (6.6 per cent), Norwich Union (4.7 per cent) and Mr Pierce Casey (6 per cent).
(# signifies the euro)
