Glasgow-based engineering group Weir is selling two renewables-focused businesses in a deal worth up to £36.7 million.
The firm said it was offloading Pennsylvania-based American Hydro to Finnish outfit Wärtsilä and Spain’s Ynfiniti Engineering Services to its management as part of an ongoing £100m asset disposal programme, and the sales are expected to complete by the end of this month.
American Hydro and Ynfiniti, which were acquired in 2010, formed part of Weir’s flow control division and generated a combined operating profit of £1.4m last year, on revenues of £38m.
Although Weir – headed by chief executive Keith Cochrane – said it would book a loss of about £5m on the disposal, it told investors that its net debt at the end of June will be lower than previous guidance.
The group also said that first-half profits, due to be announced on 28 July, will come in ahead of the £74m currently forecast by City analysts. Orders for the five months to the end of May were running 15 per cent behind the same period last year, although this marked an improvement on the 21 per cent decline seen in the first three months of the year.
In February, Weir said it planned to cut a further £40m of costs this year after seeing its annual profits almost halve.
The firm, which said it was facing “unprecedented” market challenges, delivered annualised savings of £110m during the year to 1 January as orders fell across the oil and gas and minerals sectors.