Cammell Laird bosses to net pounds 14m on flotation

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The Independent Online
Cammell Laird's directors, who bought the remnants of the historic Birkenhead shipyard after its closure four years ago, are poised to emerge with stakes in the company worth almost pounds 14m when it floats on the stock market this month.

The prospectus to potential investors, published yesterday, valued the ship repair business at pounds 21.3m, compared with the pounds 1.9m paid by directors in 1995 when they bought part of the site from its previous owner, VSEL.

The current management resurrected a basin and dry dock in the north yard to use as a repair business.

After the float seven directors will jointly own 64 per cent of the company, valuing their investment at pounds 13.6m. The biggest beneficiary is John Stafford, chief executive, who will receive 38 per cent of the shares, worth pounds 8m. Stephen Martin, Cammell's operations director, would emerge with a 9 per cent stake valued at pounds 1.9m.

Though staff will also share in the bonanza, the core workforce of 250 people will emerge with around 1 per cent of the company, worth pounds 200,000. It gives employees an average share bonus of about pounds 800.

The prospectus also shows that six directors will take the opportunity to sell shares worth pounds 3.5m, raising an average of pounds 580,000 each.

The flotation will raise a total of pounds 7.5m through a placing by stockbrokers Beeson Gregory to institutional investors and private clients.

The flotation values the business at 12 times its 1997 earnings before exceptional items. In the year to the end of April it made pre-tax profits of pounds 2.2m.

Mr Stafford, 46, organised the purchase of the north yard at Birkenhead through Coastline Industries, a company which comprised most of the current management. Cammell Laird stressed that the directors had borrowed some pounds 6m since the deal two years ago to invest in new equipment.

The flotation will raise pounds 4m of new capital for Cammell Laird Technical Services, a specialist marine architecture and support business. It will also enable the company to bring two dry docks on the site back to working order, raising repair capacity. Cammell Laird has been successful in bidding for repair and refitting work from the Ministry of Defence, including a recent deal with the Royal Fleet Auxiliary.

The yard, which once employed 17,000, saw its order book decline steadily during the 1970s and 1980s and closed in 1993 with the loss of some 400 jobs. The closure of the site, the birthplace of famous vessels such as Ark Royal, ended 160 years of shipbuilding in Birkenhead.