Alfred McAlpine sells Welsh slate division for £31m

Alfred McAlpine has sold its Welsh Slate business for £31m. The buyer is Rigcycle, a company controlled by the Lagan family who run several other construction operations from a base in Northern Ireland.

Rigcycle have taken on McAlpine’s four slate quarries at Penrhyn, Blaenau Ffestiniog, Cwt-y-Bugail and Pen-yre-Orsedd.

The deal involves the immediate payment of £6m in cash followed by a further £24m on 2 January 2008, leaving a small balance that will be handed over on completion of the assignment of one of the quarry’s leases.

The slate division had been a financial nightmare for McAlpine after financial skulduggery surfaced in February last year - two senior managers were suspended for cooking the books as McAlpine revealed that the group’s 2006 profit would take a £13m hit.

It added that there would also be a knock-on effect, with the truth reconciliation process in the slate operation eating a further £15m hole in the 2007 set of accounts.

McAlpine first alerted the City to the problem with a Stock Exchange statement saying that it had uncovered “a systematic misrepresentation of production volumes and sales for a number of years by a number of senior managers at the slate subsidiary”.

It added: “Those involved sought to conceal the financial implications of their action through the pre-selling of slate at discounted prices. the board believes that the behaviour and collusion of the managers responsible has been deliberate and involves the possibility of fraud.”

The falsification dated back to 2003.

Ten months later, there has been no evidence of any personal gain.

On 10 December 2007, the board of Alfred McAlpine announced that it had agreed to the terms of a take-over bid from Carillion.