Already on 31 July the board of UK-based tobacco machinery manufacturer Molins said it had sold its Italian subsidiary Sasib, which it had acquired in August 2003.

The board of Molins had announced on 24 May 2006 its intention to either sell or close Sasib, and that discussions with potential acquirers were taking place.
On 31 July, the board said that closure of Sasib had been avoided and that on Friday 28 July 2006 the share capital of Sasib was transferred, for a nominal consideration, to Paritel, an Italian engineering business.
The total cash cost of closure was previously estimated at £ 8 million, of which £ 6 million would have been incurred in 2006. The result of selling Sasib on the terms agreed, rather than closure, is that the cash cost to Molins is approximately £ 4 million lower than the estimated costs of closure.
Sasib designs, manufactures and sells specialist machinery, predominantly packing machines for the tobacco industry. Sasib has been sold because the sales being generated by the business do not support the current cost base in Italy, Molins said. Operating losses at Sasib in 2005 were £ 0.6 million and £ 1.4 million for the period from 1 January to 24 May 2006.
As at 24 May 2006 Sasib had gross assets of £ 9.7 million (£ 12.3 million at 31 December 2005) and after deducting bank debt, creditors and other liabilities, had net book assets of £ 3.0 million. Subsequent to 24 May Molins has injected £ 4.6 million of cash into Sasib, partly to meet the losses incurred prior to 24 May. The total amount to be written off on the sale of Sasib is £ 8.5 million including transaction expenses and Sasib-related inventories held elsewhere in the Molins Group. (ci)