The photographic imaging group is to sell its shipping arm and buy back the 18 per cent stake held by Robbie Brothers, the former chairman. The company bought two ships from Mr Brothers, a Hong Kong businessman, last year to defray capital gains tax on the pounds 21m sale of its cellular communications business in 1989.
As part of the transaction, Mr Brothers' company, Beckworth, guaranteed the earnings of the ships for three years. But when the bottom fell out of the shipping market in which the vessels operate, Beckworth defaulted on a payment of almost pounds 1m.
Mr Brothers resigned as chairman in July, following the announcement of the default.
A deal has been reached whereby Beckworth in effect gives up its shares in lieu of its obligations under the ships deal.
The shares will then be cancelled, narrowing the capital base.
This agreement, along with restructuring costs in the core business, has given rise to exceptional costs of pounds 3.6m, leading to a pre-tax loss of pounds 4.8m for the six months to 31 August.
In addition, the pounds 7.5m book value of the ships has been written off as an extraordinary item along with pounds 700,000 of unsheltered CGT liability.
The ships are being sold to Andreas Shipping, a Greek company, for pounds 1, but the buyer will take liability for pounds 4.2m of CGT.
The deals will be put to shareholders at an extraordinary meeting on 9 November. The agreement with Beckworth is conditional upon the release of its Quadrant shares from a charge on them by Beckworth's bankers.
Andrew Douglas, Quadrant's chief executive, said he was 'moderately happy' with the solution. 'We looked at the legal route, but decided that was a more realistic way to recover the maximum value for shareholders.'
The group's turnover rose to pounds 26.3m ( pounds 22.8m), but there was an operating loss of pounds 1m.
There is no interim payout (1.65p); the shares fell 2p to 20p.Reuse content