Nervous wait for Smith City Greymouth
- Smiths City enters conditional agreement for sale of its retail and finance operations.
- 7 Stores to close out of 29 country wide.
- ANNOUNCEMENT EXPECTED later in the week.
Smith City Greymouth
Smiths City (NZX.SCY) today announces it has negotiated a conditional agreement to sell Smiths City businesses in a transaction that values the assets at around $60 million.
While the sale gives the Smiths City business a strong foundation on which to build, Directors believe Smiths City’s ordinary shares will retain no value following the sale.
The sale involves the acquisition of all of Smiths City Finance and the great majority of Smiths City’s stores. Approximately seven of the company’s 29 stores will not be acquired under the transaction and will close as a result of the Group’s strategic review.
The final number of stores to be sold is dependent on the lease transfers and new lease terms being agreed for those transferring stores.
The purchaser is Polar Capital, a business owned by Colin Neal, founder of the refrigerated logistics company Big Chill. In addition to acquiring the stores Polar Capital has also committed to taking over certain other liabilities.
These liabilities include commitments Smiths City has made to customers that have paid deposits for, or are awaiting delivery of, goods.
Finally, the agreement also envisages offers of employment being made to approximately 75% of Smiths City’s 465 staff.
Mr Neal reiterated his commitment that all Smiths City’s customer commitments would be honoured. “If a customer has paid Smiths City for a product, they will get the product. I am looking forward to working with the Smiths City team to build on this proud legacy. I am also grateful for the resilience and continuing loyalty they and the broader community of partners, have shown as we worked through this period of uncertainty.” Neal said.