Morgan Advanced sells off lossmaking unit

Morgan Advanced Materials has sold its Composite and Defence Systems for £2m cash and £1.5m in January, with the company keeping economic benefit of certain assets and certain liabilities.

Morgan's management is pursuing a strategy to simplify the company's portfolio and focus on "global technology businesses of scale".

The C&DS business, which generated a £1.1m headline operating loss on £21.0m of sales, in the last calendar year, has been bought by partnership between the Pasqua indigenous people of Saskatchewan, Canada and James Kempston, who will serve as the chief executive of the business.

The sale values the business at £2.5m on a cash-free, debt-free basis with £2m cash received on completion and the balance to be paid by 21 January.

"The transaction has been structured to leave Morgan with the economic benefit of certain assets, most notably the principal freehold property associated with the business, as well as certain liabilities relating to the exit of parts of the business," the company said, having provided for these liabilities in its recent interim results.