Vickers seeks pounds 100m from medical sale

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The Independent Online
Vickers, the Challenger tanks to Rolls-Royce cars group, hopes to raise pounds 100m from the sale of its loss-making medical equipment businesses.

Announcing the sale yesterday, Sir Colin Chandler, chairman, moved to curb speculation of a break-up bid for Vickers by companies such as British Aerospace or GKN, insisting that no discussions had taken place with potential predators.

"We've had no approaches. There's no truth in that whatsoever," said Sir Colin. Both GKN and, yesterday, BAe, have also denied the rumours.

Sir Colin said Vickers had already received several expressions of interest about the medical division from potential buyers. "We are looking for a single purchaser but there's not one out there yet. We wish there was." Three medical businesses are left in the group, together employing about 500 staff. The biggest of the companies makes intensive care incubators in the US.

Vickers yesterday revealed that the medical division slipped further into the red in the first half of the year, losing pounds 4.6m, compared with pounds 200,000 during the same period in 1996. Around pounds 3.6m of the losses came from the reduction in stock values.

Vickers' headline profits in the first six months of the year fell by more than half, from pounds 31.8m to pounds 15m. Most of the drop came from a pounds 12.5m provision to cover losses on the sale of another loss-making medical business, S&W, which makes monitors.

Sales of Rolls-Royce and Bentley cars rose 13 per cent, but a drop in demand for the most exclusive limousines contributed to a fall in operating profits from pounds 13.5m to pounds 9.8m. Sir Colin repeated that Rolls-Royce was not for sale, despite the continued interest from BMW, the German car group which supplies the Crewe-based company with engines and other components: "We've got no thoughts of selling it for some time, if at all. BMW would love to buy it."

Sir Colin said the long-awaited replacement Rolls-Royce, the first since 1980, would arrive before 2000.