Oilfield services provider Sovereign Oilfield Group is selling two of its subsidiaries for a total of £5.45m in cash.
The disposals were a condition of the continued support by the company’s lenders. Vertech and Labtech manufacture and rent onshore and offshore engineering cabins, air conditioning and refrigeration. Their combined operating profits were £900,000 in the year to March 2009. The cash will be used to reduce borrowings. The current banking facilities total £32.8m.
Sovereign will be left with the drilling division and the remains of its fabrication division. They generated revenues of £87m in the year to March 2009.
The shares were suspended at 21.5p a share on 26 September 2009, which valued Sovereign at £3.72m. The LSE has been indulgent and allowed Sovereign to remain suspended past the normal six months limit. The results for the year to March 2009 will be published on 15 May 2009 and the shares will be able to return from suspension.
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