Wolseley nets £24m from Irish sale

Wolseley said it was selling the 67 branches employing about 650 people to private buyer WIBHM for 5.8m in cash with the balance covered by a loan note carrying a coupon of 10 per cent and to be repaid within one year.

The company, which describes itself as the world's biggest trade distributor of plumbing and heating products and has operations in Ripon, North Yorkshire, said it had also agreed to fund a deficit in the Northern Ireland pension scheme currently estimated to be 4.9m.

The pension deficit will be repaid by the purchaser by means of a separate loan note with a coupon of 3 per cent and repayments due to start at the end of its second year at a rate of 1.3m per annum.

Both loan notes are secured in full on WIHL freehold property assets in Ireland, Wolseley said.

The businesses to be sold in the Republic of Ireland include Heat Merchants, Brooks, Tubs and Tiles and Encon Ireland while in Northern Ireland the company is selling its Brooks business.

"Wolseley is disposing of the businesses in line with its strategy of focussing its activities where we have built sufficient scale, established leading market positions and can deliver an appropriate financial return," the company said in a statement.

The businesses to be sold had combined sales of 204m in the year to the end of July 2009 versus Wolseley's total group revenue of 14.4bn.

The disposal had been expected after the group said in September that it would restructure and focus on its core regions of Britain, the United States and Scandinavia.