Freeplay Energy is selling its eponymous business to its partner in its Indian joint venture.
Devinder Raj Narang, chairman of Narang Group India, has offered $14.5m, including $5m of debt, for the Freeplay division. The final $1.5m of the purchase price is payable for the remaining 10% of the division on or before the last day of 2009.
In 2007, the Freeplay division lost $4.5m on revenues of $7.9m. Even if this is excluded, Freeplay Energy still lost more than $5m last year.
This will leave Freeplay Energy with US-based Dixie Sales, a logistics and consumer call centre business. It generated sales of $37.2m in 2007 - a like-for-like decline of 3%. Low margin business has been stopped and $3m cut from annual expenses.
At the end of April 2008, Dixie had drawn down $9.2m from its bank facility, while Freeplay Energy should get an initial $8m from the sale of its Freeplay division.
At 6.625p, Freeplay is valued at £6.42m.
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