Ennstone's loose cannon - its American directors

Ennstone has put itself into an exciting position (to anyone outside of Ennstone that is) because over in America the directors of its subsidiary Ennstone Inc have flogged off assets that were on the books at a value of £3.2m for £2.1m of cash…and all of this without permission of the group’s main board here in the UK.

Trading in Ennstone’s shares have been on hold since 28 January 2009 “pending clarification of the group's financial position”

Ennstone has commented on the latest development saying: “At the time of the suspension the cash position of the group's wholly-owned US subsidiary, Ennstone Inc was critical, having suspended payments of interest charges and finance lease repayments to its US lenders.

“At that time discussions with those lenders were on-going. No agreement on a way forward has yet been concluded.”
 
But what has now surfaced is that on 21 February the board of Ennstone plc was informed by the directors of Ennstone Inc that Ennstone Inc. had completed the sale of certain assets of Ennstone Inc.

Not only that but they had made the move “having taken legal advice”.

The assets in question are in Charlottesville and Elkton, Virginia.

The US chiefs said the move was to fund immediate cash requirements.

But Ennstone here in the UK has now told the Stock Exchange: “The sale was completed contrary to formal, written instruction from Ennstone plc in which the directors of Ennstone Inc had been reminded that significant disposals would require the approval of Ennstone shareholders under the Listing Rules [i.e. conditions agreed in order to obtain a London Stock Exchange listing].
 
Ennstone Inc is understood to be currently negotiating with its US lenders as to how the proceeds of the transaction - which will be retained in the US - will be applied.

Ennstone has rarely caused such excitement.