Royal Group progresses with dispositions of non-core assets
April 09 2006 - 7:07PM
PR Newswire (US)
- Sells Baron Metal Industries - Identifies additional assets for
disposition - Now expects total proceeds from dispositions to total
$260 to $300 million in 2006 TORONTO, April 9
/PRNewswire-FirstCall/ -- Royal Group Technologies Limited (RYG:
TSX; NYSE) today announced that it has completed the sale of its
Baron Metal Industries subsidiary. Royal Group also announced today
that it has completed divestitures of a tooling company located in
Woodbridge, Ontario and 550 thousand square feet of redundant
manufacturing space. As was previously announced, Royal Group has
completed the sales of Royal Alliance, Amut, its extruder equipment
company located in Italy and a U.S. - based tooling company. The
Company advised that proceeds from divestitures since January 1,
2006 were approximately $120 million, inclusive of approximately
$90 million cash received to date and approximately $30 million to
be received prior to the end of the second quarter. Royal Group
previously indicated that it expected further proceeds from
dispositions to be in the range of $60 to $80 million during the
remainder of 2006. Today, Royal Group announced that it has
identified additional assets to be disposed of, which will include
excess real estate as the Company focuses on an optimal warehousing
and manufacturing footprint to support its core businesses serving
North American customers. Royal Group anticipates that these
additional assets will be sold during the remainder of the year.
Royal Group expects to generate proceeds of $80 to $100 million
from sales of these additional assets. "We now expect proceeds from
dispositions to total $260 and $300 million in 2006, which will
allow us to significantly enhance the Company's liquidity
position", commented Lawrence J. Blanford, Royal Group's President
and C.E.O. "These divestitures will give us the financial
capability and flexibility to help further develop our core
businesses", added Mr. Blanford. Royal Group Technologies is a
leading producer of innovative, attractive, durable and
low-maintenance home improvement and building products, which are
primarily utilized in both the renovation and new construction
sectors of the North American construction industry. Royal Group is
the recipient of several industry awards for product innovation.
The company has manufacturing operations located throughout North
America in order to provide industry-leading service to its
extensive customer network. Additional investment information is
available on Royal Group's web site at
http://www.royalgrouptech.com/ under the "Investor Relations"
section. The information in this document contains certain
forward-looking statements with respect to Royal Group Technologies
Limited, its subsidiaries and affiliates. These statements are
often, but not always made through the use of words or phrases such
as "expect", "should continue", "continue", "believe",
"anticipate", "suggest", "estimate", "contemplate", "target",
"plan", "budget", "may", "will", "schedule" and "intend" or similar
formulations. By their nature, these forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant, known and unknown, business, economic, competitive
and other risks, uncertainties and other factors affecting Royal
specifically or its industry generally that could cause actual
performance, achievements and financial results to differ
materially from those contemplated by the forward-looking
statements. These risks and uncertainties include the ongoing
shareholder value maximization process and its outcome; the ongoing
internal review and investigations by the Audit Committee of the
Board of Directors and its outcome; the negative impact that may be
caused by the delay in filing of Royal Group's 2005 financial
statements, including, without limitation, a breach by Royal Group
of its banking agreement, an adverse effect on Royal Group's
business and the market price of its publicly traded securities,
and a breach by Royal Group of the continued listing requirements
of the New York Stock Exchange and Toronto Stock Exchange;
fluctuations in the level of renovation, remodelling and
construction activity; changes in product costs and pricing; an
inability to achieve or delays in achieving savings related to the
cost reductions or increases in revenues related to sales price
increases; the sufficiency of our restructuring activities,
including the potential for higher actual costs to be incurred in
connection with restructuring activities compared to the estimated
costs of such actions; the ability to recruit and retain qualified
employees; the level of outstanding debt and our current debt
ratings; Royal's ability to maintain adequate liquidity and
refinance its debt structure by April 10, 2006, the expiry date of
its current bank credit facility; the ability to meet the financial
covenants in our credit facilities; changes in product mix; the
growth rate of the markets into which Royal's products are sold;
market acceptance and demand for Royal's products; changes in
availability or prices for raw materials; pricing pressures
resulting from competition; difficulty in developing and
introducing new products; failure to penetrate new markets
effectively; the effect on foreign operations of currency
fluctuations, tariffs, nationalization, exchange controls,
limitations on foreign investment in local business and other
political, economic and regulatory risks; difficulty in preserving
proprietary technology; adverse resolution of any litigation,
investigations, administrative and regulatory matters, intellectual
property disputes, or similar matters; changes in securities or
environmental laws, rules and regulations; currency risk exposure
and other risks described from time to time in publicly filed
disclosure documents and securities commission reports of Royal
Group Technologies Limited and its subsidiaries and affiliates. In
view of these uncertainties we caution readers not to place undue
reliance on these forward-looking statements. Statements made in
this document are made as of April 9 2006 and Royal disclaims any
intention or obligation to update or revise any statements made
herein, whether as a result of new information, future events or
otherwise. DATASOURCE: Royal Group Technologies Limited CONTACT:
Mark Badger, Vice President of Marketing and Corporate
Communications, Royal Group Technologies Limited, Phone: (905)
264-0701
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