Nature Group sells loss-making Gibraltar subsidiary for £4m

Nature Group, a provider of port reception facilities and waste treatment solutions for the oil, marine and process industries, has brought an end to an “unhappy chapter” in its history by selling its loss-making Gibraltar subsidiary, but warned that its losses for the year would widen “substantially”.

The AIM-listed company sold the Nature Port Reception Facilities subsidiary to GibOil for £4m, of which £3m was paid on closing and the remaining £1m will be retained in escrow for up to two years.

Nature Group reported an after-tax loss for both continuing and discontinued operations of £1.4m for the first six months of 2016 and it anticipates this loss to widen “substantially” for the full year due to a continued downturn in the oil and gas market, losses incurred in its Portuguese joint venture and further write-downs and re-organisation expenses.

The sale of the subsidiary will be posted in accounts for 2017, not 2016.

The subsidiary was created as part of a long-term agreement with the government of Gibraltar and, prior to Nature Group’s activities in the region being wound down in early 2016, the subsidiary operated the company's reception, treatment and storage facilities for maritime waste in Gibraltar.

Chief executive Jan Vesseur, said: "This has been a long-anticipated and crucial step in the significant restructuring effort that was first initiated by the new executive team over 16 months ago. Not only does the completion of the sale finally bring an end to an unhappy chapter in the company's history, it also brings in a substantial amount of new capital to be deployed with the objective of beginning to restore and increase shareholder value.”

He said that the proceeds of the sale will be used for "some relatively small but sensible investments” that the company had postponed due to cash restrictions, potentially including investments in Rotterdam and Houston, and in the oil and gas division, subject to expected demand.

Subject to there being no breach of any warranty agreed, £200,000 of the £1m in escrow is payable in June and the balance of £800,000 would be paid after 24 months after closing of the sale

Shares in Nature Group were up 12.3% to 11.37p at 0913 GMT.