Johnson Matthey to close battery materials business, sell assets
Johnson Matthey has announced the proposed closure of its battery materials business and the sale of the individual assets after talks over the sale of the entire division failed to result in an agreement.
The company said in November that it had decided to sell the segment, arguing that the potential returns from the unit would not be adequate to justify further investment.
"Further to that announcement, we have held discussions with a number of parties about a sale of the entire business," JMAT said on Wednesday. "These discussions have not resulted in an agreement to sell the entire business as a going concern. Consequently, we are announcing today that we are commencing consultation with our employees about our proposed closure of the battery materials business, and we are pursuing the sale of its individual assets."
At the interim results, it fully impaired the carrying value of the battery materials assets as at 30th September 2021, resulting in a charge of £314m. It said that while the outcome of the sales process is uncertain, full or partial closure will result in additional impairment charges, the settlement of contractual liabilities, redundancy, closure and abandonment costs, as indicated in November.
After anticipated asset disposal proceeds, the company estimates these cash costs will be around £150m, which will be recorded as an exceptional item outside of underlying operating profit in the full-year results.
At 1435 GMT, the shares were down 2.4% at 1,992p.