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Nviro Cleantech

  • BY: Andrew Hore |
  • POSTED: 20/11/2009 |

Nviro Cleantech says that it is considering an all-share bid for engineer Southbank UK.

The offer would be 1,000 Nviro shares for every 7,849 Southbank shares. This is effectively a reverse takeover. Nviro, which is undertaking due diligence, will need to raise cash from a share placing.

CISX-listed Southbank UK has a strategy of acquiring niche engineering companies. Southbank joined CISX in March 2006 after it acquired Hayward Tyler. Luton-based Howard Tyler was established in 1815 and supplies fluid filled electric motors and pumps for the power generation and oil and gas markets. 

Southbank’s acquisition criteria is that it should be a profitable, energy-related niche engineering business with a worldwide market, good cash generation and strong management. http://www.southbankplc.com/

Southbank reported a loss of £3.16m on revenues of £30.2m in 2008. In the first six months of 2009 the company lost £1.19m on revenues of £19.8m. The loss included exceptional charges of £1.18m, of which £1m relate to foreign exchange losses. There is a £482,000 pension deficit in the balance sheet.

Net debt was £9.6m at the end of 2008 and there was a £3m outflow in the first half of 2009.

The latest bid/offer spread for Southbank is 4p/6p. Shares in Nviro have been suspended at 5.5p each, which values the cleantech developer at £3.63m. This would value Southbank at 7p a share.

Nviro shares will remain suspended until it issues a document and convenes a general meeting or the deal is no longer going ahead. There was still £5.95m of cash left in the bank at the end of March 2009 and this fell to £3m by the end of September 2009. Nviro has said that it has enough cash until the end of September 2010.

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