LONDON, UK: Leeds Group plc has conditionally agreed to sell the entire issued share capital of its subsidiary, Hemmers-Itex Textil Import Export GmbH (Hemmers), to a subsidiary of Nooteboom Bidco B.V. for a cash consideration of approximately £657,000.

The consideration is based on the net assets of Hemmers as at 30 November 2023, excluding properties, less an agreed discount.  Leeds will retain three properties currently owned by Hemmers which have an aggregate net book value of £5,209,000. 

The disposal is subject, inter alia, to the approval by Leeds shareholders at a general meeting and competition clearance from the German Cartel Office.

Hemmers has been loss making for a number of years and the Board have looked at various options available to return Hemmers to profitability.  In the year to 31 May 2023, Hemmers had turnover of £24,290,000 (2022: £23,998,000) and had a loss before taxation of £793,000 (2022: £781,000).

For some time, the Board has believed that Hemmers, in the long term, is not able to operate as a profitable standalone entity and that the best interests of Hemmers would be better served as part of a larger organisation reflecting the general consolidation that is taking place in the textile market and thereby offering economies of scale in terms of purchasing and sales.  The Board has held discussions with a number of interested parties and consider that proposed sale is the best deal available.

Leeds Group Board believes that the proposed sale is in the best interests of the Company, shareholders and Hemmers-Itex Textil Import Export GmbH and will recommend shareholders vote in favour of the proposed sale.  Certain major shareholders, representing 54.24% of the Company’s shares, have indicated that they will vote in favour of the proposed sale.

The effect of the proposed sale will be that the Company will no longer have any trading business or activities and will become an AIM Rule 15 Cash Shell.  The disposal will constitute a fundamental change of business of the Company under Rule 15 of the AIM Rules and is therefore conditional on the passing of a resolution to approve the disposal at a general meeting of the Company.

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