Tiphook warns container sell-off may not save it: Board upheaval accompanies pounds 180m loss as deal with Transamerica nears completion

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The Independent Online
TIPHOOK yesterday moved closer to selling its container operations to Transamerica, but announced it had lost pounds 180m in the half-year to 31 October and warned it was still on the brink of collapse.

The company said that even if the sale was completed, there could be no assurance the group would not be forced into administration or liquidation.

The warning was made after the stock market closed. Tiphook's shares rose 3p to 67p yesterday.

The company also announced sweeping boardroom changes. Robert Montague is splitting his roles as chairman and chief executive and five directors, three of them executive, are resigning.

Rupert Hambro, non-executive deputy chairman, has agreed to take the chair temporarily.

Eric Goodwin, the executive deputy chairman who joined Tiphook when it was founded in 1978, will resign after an extraordinary shareholders' meeting on 10 March called to vote on the sale of the container operation. No agreement has been reached on compensation.

Christopher Palmer, managing director, and Nicholas Smith, legal director and company secretary, have agreed to resign if shareholders approve the container sale.

Tiphook and Transamerica have yet to finalise a price for the container business, but they hope to complete the deal next month after signing a conditional agreement yesterday. As previously announced, the transaction is based on a purchase price of pounds 757m less changes in the value of net assets from 30 September to the date of completion. Tiphook estimates an asset reduction of pounds 23m.

Despite the size of the sale, Tiphook will have to make big goodwill write-offs, resulting in a 'substantial net loss'.

Meanwhile, the company said it continued to borrow money to meet its financial obligations and was dependent on the support of the banks. Tiphook has pounds 1.1bn of debts and said it had breached several banking covenants and was in danger of breaking more agreements.

Creditor banks, led by National Westminster, have made interim lending facilities available until 15 March. Subject to completion of the sale and other conditions, they have agreed to provide new facilities.

For legal reasons relating to the group's new arrangements with banks, Martin Kohlhaussen and Sir Charles Powell, respectively chairman of Commerzbank AG and a non-executive director of National Westminster Bank, will resign as non-executive directors.

The interim results were struck after pounds 155m of exceptional charges, including pounds 50m for contracts with Ballyvesey and Schmitz, makers of trailers and equipment. The Ballyvesey contract was for pounds 133m of trailers between April 1993 and January 1997. The agreement was terminated after only pounds 6.6m worth of trailers had been paid for.

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