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APV sells troubled French subsidiary

Terence Wilkinson
Wednesday 27 July 1994 23:02 BST
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THE international food and beverage machinery maker APV has sold Pavailler, its troubled French retail bakery equipment company, to a buy- in group for a nominal sum, writes Terence Wilkinson.

Acquired along with Baker Perkins in 1987, APV Pavailler Equipement became an insoluble problem for APV in recent years. Last year it lost Fr57.8m ( pounds 7m) and it has been losing money at a similar rate so far in 1994.

Neil French, APV's finance director, said that since acqusiition Pavailler had cost APV around pounds 10m in losses and restructuring costs. The business ended 1993 with net liabilities of Fr10.6m.

'We have done a lot of work in downsizing the operation. But this year the French market, which takes 70 per cent of Pavailler's output, is down by around 25 per cent and causing substantial losses.'

He said the sale for a nominal sum enabled APV to exit the business without showing either a profit or a loss although the trading losses would be consolidated in APV's first-half results.

The sale would also enable management in APV's dry foods business to concentrate efforts on its core activities.

The buyer is Orbreck, a management group led by two British businessmen.

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