Chemring sells European munitions arm to Nexter Systems

24th Apr 2014 07:55

Defence group Chemring is selling its European munitions business for up to 167.8m euros.The company, which makes flares and anti-aircraft countermeasures, is selling Belgian tank ammunition business Mecar and Italian group Simmel, which specialises in naval ammunition, to France's Nexter Systems.It said the sale would allow it to focus on its core sensor & electronic, countermeasure and energetic systems businesses.Chemring plans to use the cash to re-pay part of its revolving credit facility with the balance offered to holders of the group's loan notes, with whom it has agreed improved arrangements.The deal is expected to dilute underlying earnings per share in this financial year to October 31st.Chief Executive Mark Papworth said: "The sale of our European munitions business implements a key recommendation of our strategic review and represents a significant milestone as we re-position Chemring for future growth."PW