Cavalier to trim debt by $6.5 million
Sale to help trim debt.
Cavalier Corp [NZX: CAV], which is restructuring its business to revive its earnings, expects to cut debt by $6.5 million from the sale of its Ontera Modular Carpets unit.
The Auckland-based company flagged the sale to Australia's Milliken & Co earlier this month, and anticipates the deal will settle in one or two weeks, it says. The deal is conditional on key Ontera employees accepting jobs with Milliken and the transfer of certain contracts and leases to the Australian company.
If the sale goes ahead, Cavalier said it is expected to release about $6.5 million, which will go towards the company's debt reduction programme.
Earlier this month, Cavalier said it had already lowered bank debt by $6 million, and is looking at asset sales, job cuts and outsourcing to try and lift profit.
As at December 31, Cavalier's net debt was at $59.1 million, and the debt-to-equity ratio stood at 39%, a level it called "too high".
The shares last traded at 41c, and have dropped 33% this year.
(BusinessDesk)
Paul McBeth
Thu, 27 Aug 2015
Thu, 27 Aug 2015
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Cavalier to trim debt by $6.5 million
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