Tiphook agrees to pounds 757m sell-off: Troubled group's future still hangs in the balance as shareholders ponder sale of containers division

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The Independent Online
THE FUTURE of Tiphook, the debt-laden transport leasing group, still hung in the balance last night after it announced it had agreed a price of pounds 757m for its containers division.

The deal values the assets at pounds 77m less than originally agreed, following due diligence work by the buyer, US giant Transamerica. But the sale is conditional upon agreement by Tiphook's shareholders and some of its lenders.

The company said it would give detailed proposals for the financial reconstruction of the business in a circular to shareholders by the end of the month.

But one banker with an exposure to the company said: 'The deal looks conditional on so many things to me. There is no trading statement and there is not enough information on which to make a decision.'

But analysts agreed that the price for the container division was still a good one, despite its fall from the pounds 830m initially agreed. The company had assured bankers that the price would not fall below pounds 780m after reports in the Independent on Sunday that the amount Transamerica was prepared to pay dropped as due diligence proceeded.

However, there was still scepticism that Tiphook would be able to trade out of the rest of its debts following the sale of the containers division. The remaining business - largely trailer leasing - has been losing money and would still have to support some pounds 500m of debt.

Tiphook also revealed that average utilisation of its 25,000-strong trailer fleet had improved in December from 83 to 85.24 per cent. But the company admitted that recessionary pressures were still affecting margins in most markets.

Adam Moskowitz, an analyst at BDS Securities in New York, said: 'The price for the containers is still way above expectations, but we're waiting for them to disclose how they're going to use the proceeds. Obviously, they will need a portion of it for working capital to keep the trailer division going. The question is: do holders of Tiphook want to hold on to a trailer company with questionable prospects of earnings and cash flow?'.

Tiphook shares fell 6p to 66p. The group, founded by its controversial chairman and chief executive, Robert Montague, has been in crisis since it issued its third profits warning in a year and said it would breach banking covenants last October.

(Photograph omitted)

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