Proventec sells shares in Magma Firestop
SUSPENDED steam cleaning group Proventec has sold its holding in fire retardant developer Magma Firestop.
The Liverpool company, which has been grappling with loan interest payments, said the sale to its largest supplier – Holland-based AD International – was in line with the company’s strategy of exiting its non-core investments.
Magma develops a range of fire retardant coatings, for the treatment of building and thatching materials. The undisclosed proceeds of the sale will be used to develop Proventec’s core business.
Chief executive David Chestnutt said: “The board continues to follow our strategy of exiting non-core investments. We remain committed in maximising shareholder value and the disposal of the Magma allows us to focus our efforts on achieving this.”
Proventec admitted it was facing administration in June because it was unable to pay interest of £600,000 on £15m of unsecured loan notes. A deal was struck in principle in July involving a £2.5m cash injection, a reduced value and coupon loan note and a significant conversion of debt and loan notes into shares.
The Dutch business InnoConcepts holds 36.2% of the shares in the AIM-listed firm and 75% of the loan notes. Following the deal Proventec said its term debt will be reduced to £7m and the loan note holders will have an additional 61% of the enlarged share capital of the company. A large proportion of the loan notes will be converted into equity at 57p a share.
