Listed manufacturer to sell part of loss-making division

Wakefield-based manufacturer Carclo Group is to sell off Wipac Czech to Magna Automotive Europe for £943,000.

Wipac Czech designs and develops automotive lighting, historically acting as a sub-contract engineering resource for the main Wipac business in Buckingham.

Wipac is the main operating business in Carclo Group’s LED Technologies Division and has been incurring significant operating losses.

Carclo, a manufacturer of fine tolerance injection moulded plastic parts mainly for the medical, automotive lighting and optics markets, says the deal announced today will involve the sale of 100% of the share capital of Wipac Czech for a total consideration of €1.1m (£943,000).

This comprises €0.8m in cash and the assumption of €0.3m of outstanding liabilities.

Cash proceeds from the transaction will be used to reduce the outstanding net indebtedness of the Group.

In the year to 31 March 2019, Wipac Czech reported operating profits of €0.1m and had gross assets of €0.9m at the period end. Completion of the transaction is expected to take place on 26 November 2019.

Carclo’s markets statement on the sale concludes: “Discussions regarding a potential sale of the principal Wipac UK business remain ongoing, with negotiations now in an advanced stage with a single party.

“However, there remains no certainty that a successful sale of this business will occur nor as to the terms or structure of any such transaction.”