Cavalier agrees on Bremworth

Press, 29 June 1988, Page 33

Cavalier agrees on Bremworth

PA Wellington Cavalier Corp yesterday confirmed its takeover of UEB, Ltd’s subsidiary, the Bremworth Carpet Group, will proceed. The management of Cavalier Corp and UEB Industries have reached agreement on the terms of the sale which provides for a part cash/part share settlement, Cavalier managing director Mr Tony Timpson said. The Cavalier purchase offer was conditional on Bremworth staff agreeing to accept Cavalier’s terms ol employment The majority of staff al Bremworth’s plants at Papatoetoe and Awatoto, neat Napier, have now confirmed their support of the move.

The purchase price has not been disclosed.

Cavalier will take over Bremworth’s spinning plant at Awatoto and its Papatoetoe carpet tufting plant as going concerns, as well as the Bremworth carpet brand name.

Cavalier Corp will call an extraordinary general meeting of its shareholders to ratify the agreement. The takeover has already received Commerce Commission approval. The enlarged company will produce about one-quarter of domestic caipet sales and just

under half of New Zealand's export sales. The sale of its spinning and tufting operations to Cavalier represents a withdrawal from direct involvement in carpet manufacturing by UEB Industries.

In the last ten years, UEB. carried out an expansion programme resulting, in a group of companies which controlled the processing of wool from purchase at auction through to scouring, spinning and production into carpet. But in the face of high interest rates, high raw material and internal costs, loss of export incentives and an appreciating New Zealand dollar, the UEB Carpet Group had been gradually reducing its operations, UEB managing director Mr Murray Higgs said. Since 1986 UEB has sold wool scouring plants in Waihi, Awatoto and Invercargill, its Christchurch spinning plant, and its Australian subsidiary Mycraft Carpets. Cavalier expects to make substantial savings in its marketing operations in Australia - and the U.S.

Within New Zealand, however, Cavalier will continue to operate its spinning plants at Wanganui and Wiri and its Win carpet plant, together with the two Bremworth plants.