PipeHawk agrees to sell Utsi Electronics for £1m

(Sharecast News) - PipeHawk said on Wednesday that it has agreed to sell its Utsi Electronics subsidiary for £1m in cash, as it looked to streamline its operations and focus on its remaining businesses. The AIM-traded group said it had entered into a binding conditional sale and purchase agreement with Hong Kong-incorporated Leidi Global Supply for the disposal of the entire issued share capital of Utsi Electronics.

It said it would receive a £25,000 deposit, which would be non-refundable except in limited circumstances, with the balance of the consideration payable on completion and to be applied to the group's working capital requirements.

Following completion of the transaction, PipeHawk said its activities would be concentrated across Thomson Engineering Design and Adien.

The firm added that the gross assets subject to the disposal were £0.43m as at 30 June, while Utsi generated a loss before tax of around £0.46m in the year ended 30 June.

It said the disposal remained subject to a number of customary conditions, including approval under the UK National Security and Investment Act.

PipeHawk said there could be no certainty over the timing of completion or whether the relevant condition would be satisfied.

The long-stop date for completion was set at 28 February, with further updates to be provided as appropriate.

At 0856 GMT, shares in PipeHawk were up 31.94% at 2.11p.

Reporting by Josh White for Sharecast.com.