Cosalt Plunges to Lowest Since 1989 on Chairman’s Approach
Cosalt Plc (CSLT), the U.K. marine safety company founded in 1873 by a cooperative of fishing-boat owners, fell to the lowest since at least 1989 after an approach by chairman and Carphone Warehouse Group Plc (CPW) co-founder David Ross.
Cosalt shares plunged 39 percent to close at 0.475 pence in London trading, giving the Grimsby, U.K.-based company a market value of 1.9 million pounds ($3 million).
Ross, whose father and grandfather held the chairman’s position at Cosalt before him, is prepared to pay 0.1 pence for each outstanding share, the company said in a Regulatory News Service statement today. That is about 404,400 pounds, or 21 percent of the company’s market value at today’s close. A committee of independent directors, excluding Ross, is considering the approach, it said.
“Should an offer be put forward and he acquire control of Cosalt,” Ross plans to “provide additional capital investment to expand the group’s existing businesses,” the company said. He will also grant a personal guarantee of 300,000 pounds as security for costs incurred by Cosalt in seeking damages against two former employees for alleged fraud, the company said.
Cosalt said it has seen further pressure on its cashflow and finances since Oct. 19 when it forecast full-year trading would be “significantly lower” than estimates.
Cosalt sold its marine unit to Survitec for 27 million pounds in August to reduce bank debt. Net indebtedness after the sale was 7.3 million pounds, the company said.