Stobart Group has announced that Bavaria Industries Group (Bavaria) has assumed ownership of Stobart Rail & Civils.
The Group had stated in its financial results for the year ended 29 February 2020, that it would withdraw from the Rail & Civils business. David Shearer, non-executive chairman, said in his report: “The Rail & Civils business was impacted by continuing costs on a legacy contract which necessitated a further provision in the year. This business is unlikely to generate the appropriate returns for shareholders given the risks and we have decided to withdraw from this sector during the course of FY21.”
Now Bavaria, a family holding company that owns majority interests in companies showing clear potential for improvement or facing new challenges, has acquired the shares of Stobart Rail & Civils and will continue to run the it on a “business as usual” basis, with Bavaria acquiring all of the company’s assets, liabilities, and obligations.
Bavaria will provide financial support to Stobart Rail & Civils as it works toward returning to profitability. Under a three-month Transitional Service Agreement, Stobart Group will continue to provide certain back office services in the immediate term i.e. IT support, Payroll.
A spokesman from Bavaria commented: ““We’re really excited about working together and hope that being free from the large Corporate Parent will release the teams entrepreneurial flair!”