BM Group cuts gearing with US sale

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BM GROUP, the engineering concern, has sold Mitchell, its US distribution business, for dollars 22m ( pounds 14m) and reduced gearing below the 100 per cent level, writes Robert Cole.

As a result, BM's group debt fell from pounds 66m to pounds 52m as of 30 June 1994, the end of the company's financial year.

Mitchell specialises in the sales and servicing of construction and mining equipment. It supplies excavators, cranes and compacting equipment for manufacturers such as Komatsu Dresser and Ingersoll Rand.

Mitchell, which is based in Charlotte, North Carolina, made a pre-tax profit of dollars 2.4m in the year to 30 June 1993, up from dollars 1.7m the year before.

The purchaser is the Marubeni Corporation of Japan. BM said yesterday that the disposal formed part of the company's attempt to rebuild its finances.

Shares in BM, a former stock market star which grew steadily by acquisition through the 1980s and early 1990s, collapsed when the founder chairman, Roger Shute, resigned in 1992. They fell from a peak of 425p in November 1991 to 16p by August 1993. Yesterday, they closed 2p up to 38p after the announcement.