News that hard-pressed Simon Engineering is to wipe off its $78m (£48m) US borrowings, cutting gearing from 100% to around 35%, via the sale of its biggest business, bounced the shares up 20% to 41p, still less than half their peak 1996 price.
Simon is selling the industrial activities of its Access division in the US to Terex for $90m. The rest of Access, which makes fire and rescue equipment, is also to go. The company is now shrunk to storage and process engineering.
Another struggler, Mackie, which makes textiles machines, gained a few pence on news of an approach by a potential bidder. The shares had tumbled from nearly £4 a year ago to 160p on a profit warning last November following the loss of a Chinese order.
Among the majors, Lucas Varity was buoyant on word of an order from General Motors and a buy tip from broker Henderson Crosthwaite. GKN recovered ground on news that damages against it in connection with its US exhaust retailing business might be much less than expected.
Ahead of Wednesday’s 1996 results, British Aerospace continued in strong form with the market cheered by news that it was apparently not about to throw in its lot with GEC.
Ultra Electronics, the aerospace and defence systems group, scored a useful gain on news of a £48m contract to supply acoustics for BAe’s Nimrod 2000 RAF maritime patrol aircraft.
Among smaller firms, Aim, the aircraft interiors maker, hit a new high on a strong buy tip in an investment magazine.