Thursday, Oct 6, 2022
International Finance
Company

GKN plans to sell its assets to pay its shareholders

The company will pay £2.5 billion in cash to its shareholders

GKN, a global automotive and aerospace major stated that the company will be selling off its non-core parts and refund £2.5 billion in cash to its shareholders.

The refund process will be done in the next three years.

Seeing the company having low profits in 2017, GKN carried out an extensive evaluation of its business.

The UK based organization has devised a new strategy and transformation plan that involves the selling of a range of businesses in the next one to one and a half years.

GKN Chief Executive Anne Stevens said: “The new strategy brings clarity, accountability and focus to GKN’s world class businesses and will allow the group to attain world class financial performance.”

“Too often we pursued growth at the expense of returns; this will no longer be the case. The new strategy brings discipline, both financial and operational.”

“This strategy is expected to generate significant cash for shareholders in the short term and meaningful sustainable cash flows over the mid to long term,” she added.

The strategy is a move to keep away an attempted £7.4 billion takeover bid by the Melrose Industries. GKN rejected the bid saying that Melrose ‘fundamentally undervalued’ them.

But Melrose opined that if GKN would have accepted the bid, it could ‘deliver significantly greater benefits’ to the company’s shareholders.

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