EXEL SELLS OFF GERMAN FROZEN FOOD DISTRIBUTION BUSINESS
Exel said Thursday it is selling off its loss-making German deep frozen food distribution business to a management buyout team, and is restructuring other chilled operations in Germany.
The action follows termination of a contract by a major Exel customer, Burger King, in September.
The net cash costs related to the sale and restructuring will be about '6.3 million ($9.14 million). After taking account of net assets in these operations, there will be a further '3.2 million ($13.35 million) loss on disposal of the food distribution business. In addition, goodwill of '17.7 million ($25.68 million) previously written off to reserves, will be written off through the profit and loss account, Exel said.
Exel's German deep frozen and chill operation, which was originally acquired by NFC plc through a series of transactions in the early 1990s, has been consistently losing money in recent years. It lost about '1 million ($1.45 million) in 2000 on revenues of '134 million ($150.90 million).
'This action completes the restructuring of the loss-making European network operations, which were neither strategically nor commercially attractive to Exel,' said John Allan, chief executive officer.
Exel also sold off its French Chill operation last year.