GenCorp Inc. has signed an agreement to sell its GDX Automotive business (GDX) to Cerberus Capital Management, LP, a New York based investment firm.
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GenCorp will receive $US147 million in cash for the business, on a debt-free cash-free basis. The sale, which is subject to regulatory approvals and other conditions, is expected to close during the company’s fourth quarter, which ends on November 30.
GenCorp last week announced it had classified GDX as a discontinued operation as of the second quarter of 2004, and the company recorded a one-time charge in that quarter of $261 million to reflect the estimated disposition value.
“The sale of GDX represents a major step in our effort to transform GenCorp into a more focused entity. This transaction allows us to make available additional assets for investment in our aerospace, defence and real estate operations, where we believe we can achieve higher returns and growth,” said GenCorp chairman Terry Hall. “Both GenCorp and Cerberus are dedicated to achieving a seamless transition.”
GenCorp’s board has also decided to eliminate its quarterly dividend until further notice. The company plans to invest the funds it previously used for dividends in its core businesses.
