Printer Friendly

BLUE CIRCLE INDUSTRIES PLC REPORTS ACQUISITION OF CELSIUS AND RIGHTS ISSUE OF 123,588,529 NEW ORDINARY SHARES AT 200P PER SHARE

 BLUE CIRCLE INDUSTRIES PLC REPORTS ACQUISITION OF CELSIUS AND RIGHTS ISSUE OF 123,588,529 NEW ORDINARY SHARES AT 200P PER SHARE
 LONDON, June 4 /PRNewswire/ -- Blue Circle Industries PLC has agreed to acquire Celsius, a subsidiary of Nord Est S.A., for a cash consideration of 124.9 million pounds sterling. Celsius has net debt amounting to 81.2 million pounds.
 -- Celsius is the parent of a group of companies which are engaged primarily in the development, manufacture and sale of a broad range of heating products including boilers and radiators. These products are sold widely in continental Europe under brand names including Chappee, Brotje, Finimetal, Burnham and Rodiac.
 -- In the year ended Dec. 31, 1991 Celsius earned operating profit of FFr 227 million (23.4 million pounds) on turnover of FFr 3,506 million (361 million pounds).
 -- Blue Circle proposes to raise approximately 241.6 million pounds (net of expenses) by way of a rights issue on a 1 for 5 basis to ordinary shareholders and a 1 for 9.625 basis to convertible preference shareholders at a subscription price of 200p per new ordinary share.
 -- In the absence of unforeseen circumstances, the board of Blue Circle intends to recommend unchanged total dividends of 11.25p per ordinary share in respect of the year to Dec. 31, 1992.
 -- The rights issue has been fully underwritten by Baring Brothers & Co., Limited and the joint Brokers to the issue are Cazenove & Co. and Hoare Govett Corporate Finance Limited.
 Commenting on the acquisition, Charles Young, chief executive of Blue Circle Home Products (a division of Blue Circle) said: "Celsius has leading positions in the French and German heating markets, sound manufacturing facilities and extensive distribution and brand strength. It is an excellent fit with our existing Home Products core businesses."
 The board of Blue Circle Industries PLC ("Blue Circle" or "the company") today announced the acquisition of 99.8 percent of the share capital of Compagnie Internationale du Chauffage S.A. ("Celsius"), a subsidiary of Nord Est S.A., for a cash consideration of FFr1.23 billion (124.9 million pounds sterling) ("the acquisition"). Celsius has net debt amounting to 81.2 million pounds. The acquisition is conditional, inter alia, on compliance with French regulatory control of foreign investment.
 Blue Circle proposes to issue approximately 123.6 million new ordinary shares of 50p each in the company ("new shares") by way of rights ("the rights issue"), at a subscription price of 200p per new share to raise approximately 241.6 million pounds (net of expenses). The rights issue, which has been fully underwritten by Baring Brothers & CO., Limited, is not conditional upon the completion of the acquisition. The joint brokers to the issue are Cazenove & Co. and Hoare Govett Corporate Finance Limited.
 The directors of Blue Circle believe that the acquisition is an important step in achieving the company's objective of building a strong European market position in home products and that the rights issue will strengthen the Blue Circle Group's financial position.
 Description of Celsius
 Celsius is one of the leading companies in the European heating products market. Headquartered near Paris, it is the parent of a group of companies which are engaged primarily in the development, manufacture and sale of a broad range of heating products including oil and gas boilers, steel and cast iron radiators and other related items. These products are sold widely in continental Europe under brand names including Chappee, Brotje, Finimetal, Burnhame and Rodiac.
 Celsius is the market leader in radiators in France and a significant supplier to the growing German market through its German and French manufacturing plants. It is one of the leading manufacturers of floor-standing gas and oil boilers in France and the Netherlands and has a significant position in the German market. Boilers are manufactured at Celsius' plants in France and Germany.
 In the year ended Dec. 31, 1991 Celsius earned operating profits of FFr227 million (23.4 million pounds) on turnover of FFr3,506 million (361 million pounds).
 Background to the Acquisition
 It is a principal objective of Blue Circle to build a strong market position in each of its core businesses and, specifically, to expand the European operations of its home products division in certain chosen sectors. Through Potterton Myson, Blue Circle is a UK market leader in heating products and Blue Circle has identified this sector as an area of expansion in Europe. The acquisition of Thermopanel AB in Sweden in November 1991 was the first step in a strategy to develop the heating business in mainland Europe. The acquisition of Celsius significantly extends this strategy into the important markets of France and Germany as well as other European markets.
 The directors of Blue Circle believe that Celsius is a high quality business and its acquisition offers Blue Circle the opportunity to develop this policy a stage further and significantly enhance its position in the European market.
 Benefits of the Acquisition
 Celsius operates widely in continental Europe and through this acquisition Blue Circle will achieve pan-European scale manufacture in both radiators and boilers. Furthermore, Celsius' owned distribution outlets in Germany and wholesaler network in France, complemented by sales companies in Spain, Italy and Austria, are expected to offer enhanced opportunities for the distribution of other Blue Circle home products in Europe.
 Current Trading and Prospects
 The following was indicated by the chairman at the annual general meeting on May 27, 1992:
 Despite some indications of increased consumer confidence and a general feeling that conditions are now in place for an economic recovery in the UK, as yet there are few signs that an upturn is underway.
 UK cement industry volumes in the first four months were down by about 10 percent compared with the same period last year. Although there are stories of improvement, the housing market is still very uncertain, and it is this sector that should lead the recovery in construction output. Meanwhile, rationalization of the business continues to secure the company's position as the lowest cost supplier.
 In the home products division, we have also yet to see any real pickup in demand for the groups' products. Demand for heating products in the first four months of 1992 has been comparable with the same period last year. Bathroom products continue to be affected by very difficult conditions in the commercial sector of the market, though several initiatives are in place to increase penetration of the domestic sector. Across the division, the drive to cut costs, improve productivity and introduce new products continues. In Italy, Ceramica Dolomite is performing well.
 Turning to the company's overseas building materials businesses, in Blue Circle America's markets a significant improvement in demand has not yet been seen. The housing market is showing signs of recovery but the commercial market (office buildings) continues to decline. The potentially positive impact of the six year Federal Highway Bill will take some time to be felt. Elsewhere overseas, most group companies have had a good start to 1992 and the Malaysian and Chilean markets continue to enjoy strong demand.
 Principally because of the further fall in UK cement volumes, the trading outlook for the company in 1992 is not as good as in 1991. We are weathering this recession in common with the rest of British industry, and the company cannot buck this trend. However we have used and will continue to use this period to increase efficiency and competitiveness across the group. We have pursued a vigorous program of rationalization and cost reductions. At the same time, the directors have taken some very important strategic steps to secure the long-term prosperity of the group.
 Dividend Forecast
 In the absence of unforeseen circumstances, the board of Blue Circle intends to recommend unchanged total dividends of 11.25p per ordinary share of 50p ("ordinary share") in respect of year to Dec. 31, 1992.
 Reasons for the Issue
 The 206.1 million pounds gross cost of Celsius' equity and debt will be funded by the rights issue and the balance of the net proceeds of 35.5 million pounds will be used to fund the future expansion of the business. Following the acquisition and the rights issue the group will continue to be in a strong financial position with a sound balance sheet.
 Terms of the Rights Issue
 Blue Circle is offering 123,588,529 new shares by way of rights at 200p per new share to holders of ordinary shares and holders of 7 5/8 percent Convertible Cumulative Redeemable Preference Shares of 1 pound each ("convertible preference share") on the register of members at the close of business on May 29, 1992 (other than holders with registered addresses in the United States, Canada or Australia) ("qualifying shareholders") on the basis of:
 -- 1 New Share for every 5 ordinary shares.
 -- 1 New Share for every 9.625 convertible preference shares payable in full on acceptance and so in proportion for any other number of ordinary shares and/or convertible preference shares held.
 Fractions will not be allotted to qualifying shareholders but will be aggregated and sold in the market for the benefit of the company.
 In accordance with the rights attaching to the convertible preference shares, holders of convertible preference shares are being offered the right to participate in the rights issue as if their convertible preference shares had been converted in full on the record date for the rights issue into ordinary shares at the current applicable conversion rate, being 1 ordinary share for every 1.925 convertible preference shares. There will be no adjustment to the conversion terms as a result of the rights issue.
 The new shares will, when issued and fully paid, rank pari passu in all respects with the ordinary shares presently in issue, including the right to all dividends and other distributions hereafter declared, paid or made, save that they will not rank for the final dividend in respect of the financial year ended Dec. 31, 1991, payable on July 10, 1992.
 Application has been made to the London Stock Exchange for the new shares to be admitted to the official list. The rights issue is conditional, inter alia, upon such admission becoming effective. Admission is expected to become effective and dealings in the new shares (nil paid) on the London Stock Exchange are expected to commence on Friday, June 5, 1992.
 Extraordinary General Meeting
 An extraordinary general meeting has been convened to be held on June 30, 1992 at which resolutions will be proposed to increase the company's authorized share capital and authorize the directors of the company to allot ordinary shares pursuant to the rights issue and otherwise.
 The rights issue is not conditional on the passing of these resolutions.
 Documents
 Details of the rights issue and the acquisition are contained in a document which will be dispatched to qualifying shareholders today together with the provisional allotment letter and a form of proxy for use by holders of ordinary shares in connection with the extraordinary general meeting. Copies of the documents are available at the company's registered office at 84 Eccleston Square, London SWIV IPX and at Baring Brothers & Co., Limited at 8 Bishopsgate, London EC2N 4AE.
 -0- 6/4/92
 /CONTACT: Charles Young, 071-828-3456, or Miranda Evans, 071-245-8238, both of Blue Circle Industries PLC, or John Verulam, 071-280-1000, or Pierre Paris, 010-331-4265 4265, both of Baring Brothers & Co., for Blue Circle Industries PLC/ CO: Blue Circle Industries PLC; Compagnie Internationale du Chauffage ST: IN: SU: TNM


TQ-OS -- NY020 -- 7031 06/04/92 12:14 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jun 4, 1992
Words:1919
Previous Article:GREAT BALLS OF FOIL! CONTESTS RECYCLE OVER 1,400 MILES OF ALUMINUM FOIL
Next Article:COHERENT INTRODUCES MEDICAL RESEARCH LASER
Topics:


Related Articles
BLUE CIRCLE INDUSTRIES ANNOUNCES INTERIM RESULTS PRETAX PROFITS OF 42.7 MILLION POUNDS ($81.1 MILLION) IN THE FIRST HALF
WESSEX WASTE MANAGEMENT ACQUIRES WASTE MANAGEMENT LIMITED FROM NFC PLC AND WESSEX WATER PLC ANNOUNCES FUND RAISING
BLUE CIRCLE REPORTS INCREASED 1993 SALES AND EARNINGS
Lafarge Announces Annual Results 2001; * Successful acquisition and integration of Blue Circle * Growth in sales of 12%, with Blue Circle...
EURO INVESTMENT FUND PLC - Placing and Acquisition.
KRYSO RESOURCES PLC - Placing of shares and warrants.
GARTMORE GROWTH OPPORTUNITIES PLC - Statement re C Share Conversion.
PERPETUAL INCOME AND GROWTH INVESTMENT TRUST PLC - Issue of Equity.
INNOVISE PLC - Acquisition(s).
VALIANT INVESTMENTS PLC - Issue of Equity.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters