Breaking the news to
shareholders and the industry
statement announcing the sale of
its Coromal and Windsor caravan business
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FLEETWOOD Corporation managing director Brad
Denison issued the following statement on June 20
announcing the sale of its caravan manufacturing business:
Caravan Manufacturing Sale Fleetwood advises that it has today executed
a binding agreement for the sale of the Coromal and Windsor Caravan brands
and associated raw materials and finished goods stock to Apollo Tourism &
Leisure Limited (Apollo).
Coromal and Windsor are two of the most recognised brands in the caravan
industry, however given the structure of Fleetwood’s operations the timing
of a return to profitability has been uncertain.
Under Apollo's ownership the two brands will be part of a wider tourism
and leisure platform and as such have a very positive future outlook.
The sale follows the company's 17 May 2018 letter to shareholders and
prior ASX announcements in which the board advised that following
undertaking an independent strategic review of Caravan Manufacturing, the
board was considering structural and corporate alternatives for the
The sale process, which commenced in February 2018 immediately following
the strategic review, included multiple parties and a number of potential
This agreement represents the best possible outcome for Fleetwood
shareholders from a financial point of view.
It also represents a significantly lower risk and higher financial returns
to the company than alternatives that were considered during the process.
Under the terms of the agreement, Fleetwood will sell goodwill in the
business to Apollo for $1 million, and at the end of a transition period,
Apollo will purchase Fleetwood's remaining raw material and finished goods
The combined impact of a discount to be provided to Apollo on the purchase
of residual stock, operating losses during the transition period and lease
and employee termination costs is expected to be between $12m and $15m.
At the end of the transition period the Perth manufacturing facility will
In cash terms the overall process is expected to be positive due to the
recovery of goodwill, raw materials and finished goods.
As announced to shareholders on 7 May 2018, second half losses for
Fleetwood's caravan manufacturing business are expected to be between $7m
The Board had acknowledged that a resolution of shareholder
dissatisfaction with the performance of the RV business was required, and
achieving this has been a strong focus of Board and Management.
This transaction will allow Fleetwood focus on the remaining businesses of
the Company where there are positive earnings and good future prospects.
Fleetwood Managing Director Brad Denison said: "Fleetwood's operational
management have done a tremendous job of reinvigorating the Coromal and
Windsor product range over the last three years, and that has resulted in
significant gains in market share.
"Ultimately though, the board sees the future of the business as being
better served by being part of Apollo's wider tourism and leisure
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