News blog
Dawson International
- BY: Andrew Hore |
- POSTED: 20/06/2009 |
Dawson International is selling the Todd & Duncan business to Ningxia Zhongyin Cashmere Company Ltd.
Dawson is selling the fixed assets, stocks and business of the Kinross-based cashmere yarns supplier £8.375m - a discount of £5.125m to book value. An initial payment of £6.151m will be made on completion. The proceeds will be used to pay money owed to Zhongyin and reduce borrowings. Dawson will retain £5m of working capital.
The Chinese purchaser has committed to manufacturing cashmere yarn in Scotland, which has been supplying cashmere to Todd & Duncan for many years. Once the necessary approvals are obtained the deal will go through. That will take about 10 weeks.
Dawson will agree a four year supply agreement with Todd & Duncan and has also agreed a minimum level of garment orders from Zhongyin over a four year period. Dawson Chief executive Andy Bartmess will provide consultancy of up to 16 hours per month to Zhongyin.
Todd & Duncan lost £500,000 in 2008.
Giovanni Ghione has been appointed as adviser to the Dawson board.
At 3.25p a share, Dawson is valued at £7.32m.
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