Nationwide independent utilities contractor Fulcrum has sold its domestic gas pipelines business to ES Pipelines for £6.3 million.
The deal involves 31,000 pipelines and other assets carrying gas to domestic and mixed use customers previously served by the Sheffield-based group’s Fulcrum Pipelines subsidiary.
Fulcrum Pipelines retains a portfolio of approximately 2,000 pipelines serving industrial and commercial consumers.
The group, whose headquarters are on Sheffield Business Park, says the sale significantly strengthens its cash position.
The proceeds will be used to develop Fulcrum’s core infrastructure business, which designs and installs gas connections for industrial, commercial and domestic customers and accounts for 96 per cent of its revenues.
The sale coincides with the announcement that Martin Donnachie, who joined the business in May as interim chief executive, has been confirmed in the post.
Prior to Mr Donnachie’s arrival, the company had posted a pre-tax loss of £1 million for the year to the end of March, following on from a £5.6 million loss for the same period in 2012.
Mr Donnachie said: “The disposal represents an opportunity to rejuvenate the prospects for the core business, providing Fulcrum with significant additional cash resources to support the existing business and new growth opportunities.”
Chairman Philip Holder described the sale as “an excellent result for Fulcrum.”
Mr Holder said Fulcrum’s true value had not been reflected by the market prior to the deal.
This was demonstrated by the fact that the net proceeds of the sale had represented almost 80 per cent of its market capitalisation.