Royal Group Technologies Ltd. of Woodbridge, Ontario, has begun shedding the nonstrategic businesses it recently identified.
The company said Jan. 16 that it sold its 60 percent stake in housewares producer Royal Alliance to minority shareholders. The extrusion giant said proceeds from the sale of the Woodbridge injection molder are in line with its expectations, but it did not disclose terms.
Royal Alliance molds housewares, pet-care items and garden furniture under the Gracious Living trade name. The now-sole owners have been managing the business since 1990. Royal Group became involved with the firm in 1998, according to Royal Group spokesman Mark Badger. The owners did not wish to be identified.
Other divestitures are nearing completion, Royal Group said in a news release. As well, the firm expects to close on the sale of excess real estate in March. It expects real estate sales to bring in about C$40 million (US$34.5 million), while sales of businesses in the first quarter should generate another C$60 million to C$80 million (US$51.8 million to $69 million).
Royal Group said the businesses being sold and restructured had sales of about C$240 million (US$207.1 million) for nine months of 2005. The combined earnings of the businesses before interest, taxes and depreciation about broke even for the period.
``These divestitures will have no significant impact on Royal Group's [earnings before interest, taxes, dividends and amortization],'' said President and Chief Executive Officer Lawrence Blanford. ``They will serve to strengthen our balance sheet, as proceeds will be applied to debt reduction.''
In other news, Ontario Superior Court unsealed hundreds of pages of documents filed by the Royal Canadian Mounted Police to support search warrants on Royal Group and several other businesses in the past few years. Newly emerged allegations in the unsealed documents range from Royal Group providing favors to a bank manager to questionable dealings by a former partner of Royal Group with founder Vic De Zen, according to published reports. The former partner has outstanding indictments in the United States, the RCMP said. He originally was involved in the St. Kitts resort spearheaded by De Zen, but they parted ways in 1998.
Still sealed are two anonymous parcels that the RCMP used in early investigation of alleged fraud by Royal Group executives, The Toronto Star reported.
