Jul 7 2009
Ausmelt Limited (AET) has executed a Sale of Business Agreement for the sale of its Ausmelt Minmet Metallurgical Laboratory (AMML) business at Gosford, New South Wales to Australian Minmet Metallurgical Laboratories Pty Ltd, a subsidiary of Axis House (Pty) Ltd of South Africa.
Ausmelt has sold all the assets of the business, including the equipment, fixtures and fittings, intellectual property and business goodwill, effective 30th June 2009. All existing AMML business contracts and arrangements have been assigned from the date of sale and all AMML employees have accepted an offer of continued employment under the new ownership arrangements.
A small profit will be realised on the sale of the AMML business as the selling price is above the written-down value of the assets of the business.
Axis House is a mining chemical distributor based in South Africa and Southern Democratic Republic of Congo. It also purchased Ausmelt's AM2 mineral processing business in May this year.
Mr Paul Abbott, Managing Director of Ausmelt, said today: "The sale of AMML was foreshadowed earlier this year as part of the Company's plan to streamline its operations to cope better with the deterioration in market conditions caused by the global financial crisis".
?The AMML metallurgical laboratory business has been adversely affected by the downturn in activity in the Australian mining and resources industry. This has had an unfavourable impact on Ausmelt?s cash and profit position. The level of new business activity in mining and resources over the next year or so remains uncertain.
"The AMML business was an integral element of the Company's growing mineral processing business, but its strategic fit depended on the Company continuing to own and operate the AM2 flotation reagent business. It has little, if any, strategic fit with the Company's core TSL smelting business."
"The sale of the AMML business will help improve Ausmelt's cash and profit position."