SIR David Murray is poised to announce the sale of his £100 million general steels business but insists he is under "no pressure at all" from bankers Lloyds to shrink the £470m debts of Murray International Holdings.
Sir David told The Herald yesterday the decision to sell around 50% of his core metals division had been taken "two or three months ago" and a buyer had already been found. He said: "It is an area of business we don't want to be in, we are in partnership with the bank, we are under no pressure from the bank."
MIH last week revealed that Lloyds Banking Group had injected £118m in non-voting equity, making up the bulk of a £166m reduction in debt since the 2010 restructuring which saw the bank put up £150m. Also last week, the Premier Property Group division reported a £6m write-down while core operating profit almost halved in 2011.
The MIH annual accounts published on Friday admitted that, despite the restructuring, "the metals division has struggled to secure an improvement in its trading", margins had fallen from 14.5% to 13%, and £13.5m of value had been written down.
They reveal that the bank's support was needed to offset a £100m shareholder deficit in 2011, and the group as a whole made a loss of £86.9m, two–thirds of it in the £59m write-off for Rangers.
Sir David commented: "Our bad news is out of the way, the closure with Rangers and the write-down of property is the end of some significant write-downs, we are under no pressure, it is the way we want to manage our business.
"The general steels business is reliant on the construction industry, we are coming out of that, there is nothing untowar and no threat to jobs. If you check the accounts in 25 years the metals business has always made money - [but] steel is not going to be a major part of our business going forward."
The accounts show metals contributed over £200m of the group's £340m turnover last year, and Sir David said the sale would cut this by around 50%, leaving the division to focus on speciality metals and plate.
He went on: "The bank is subscribing for new shares because they have faith in the business – if they didn't, they would have done something much earlier than this."
On the new claim by Rangers owner Craig Whyte that he had "discussed the option of administration" with Sir David in negotiations about the sale, the former Rangers chairman said: "It was never discussed. With the greatest respect his offer document did not say that. I think he made a statement that the club was never in a better financial situation."
On the possible damage to his own reputation from the saga, Sir David commented: "It has tarnished a part of my business career, there is no doubt about that, but I have run the business for nearly 40 years and I employ thousands of people.
"Other than the football club we have not been involved in any administrations over the years."
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