Move to shunt US arm Stock Building Supply into new JV with Gores will cost UK firm £175m
Building supply firm Wolseley has entered into a JV with affiliate Gores Group to dispose of US firm Stock Building Supply, which will subsequently be restructured.
Wolseley has incurred a £175m exceptional loss in the process and created £375m additional covenant headroom.
Wolseley maintains a 49% equity interest, while Gores Group will invest more after a pre-packaged Chapter 11 “reorganisation” goes through. All creditors will be paid, the firm said, adding that it would “honour commitments to… trading partners”.
In a press notice, Wolseley said: “The JV preserves Wolseley's shareholder participation in long-term value potential of the business while consolidating losses and preserving cash.”
The firm will retain ownership of the construction loans business but said it would exit that too, in due course.