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Foster(John) & Son (FTJ)

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Tuesday 04 January, 2000

Foster(John) & Son

Disposal of Three Properties

Foster(John) & Son PLC
4 January 2000


John Foster & Son plc

Disposal of three properties

Further to the announcement on 10 September 1999, John Foster
& Son plc announce the completion today of the sale of Black
Dyke Mills, the adjacent Car Park Site and the Broomfield Site
in Queensbury for a combined gross purchase price of
£1,550,000, payable in cash.  Originally, the Company
announced that it would seek shareholder approval for the
transaction and at that time it hoped to include the disposal
as part of a wider circular to shareholders including an
acquisition. However, it has not been possible to complete a
transaction in the timescale envisaged and given the
importance of the disposal to the Company it has obtained a
waiver from the Stock Exchange from having to obtain
shareholder approval for this transaction.

At the last published balance sheet date the net book values
of the assets being sold were £1,023,000.  The sale results in
a profit of approximately £470,000 after the costs of the
transaction have been taken into account.  Arrangements are in
place to utilise existing tax losses available within the
Group to mitigate any potential tax liabilities which may
arise.  The net proceeds of approximately £1,500,000 will be
used to reduce Group bank debt as indicated in the financial
statement issued on 28 September 1999.  The Company has
obtained a valuation by an independent Valuer of the three
sites and the gross proceeds are £171,000 greater than the
open market valuation. For the last three financial years the
Company has operated Black Dyke Mills as part of its Property
Management business.  It generated rental income of £95,000 in
1997, £142,000 in 1998 and £226,000 in 1999 before operating
costs and interest.  The Car Park site and the Broomfield site
generated no income in the previous three financial years. The
purchaser of the three properties is Mrs. Pamela Jean Wade.

The Directors are of the opinion that completion of the sale
is in the best interests of the shareholders as a whole and
the Company, and any delay in completion would have put the
transaction at risk and led to a withdrawal of Bank support.
As detailed in the financial statements issued on 28 September
1999 and in the Auditor's report therein, the continued
support of the Banks is critical to the operational existence
of the Group for the foreseeable future.

As outlined in the financial statement the Company has re-
negotiated arrangements with its Bankers.  Under these new
facilities all bank loans and overdrafts are to be transferred
to a subsidiary undertaking, along with the Group's property
assets and its investments in John Foster (Textiles) Limited
and Broomco (JG) Limited.  The obligations to the Banks,
together with rolled-up interest, are to be met principally by
asset disposals in the subsidiary.  The Board believed that
failure to meet the timetable of 30 December 1999 for
completion of the disposal when the facilities were agreed
would have seriously risked the Banks withdrawing their
support for the Company and requiring immediate repayment of
their facilities which the Company would have been unable to
fulfil.  In these circumstances the Company would have had to
consider the appointment of an Administrator.

The disposal itself does not provide a solution to the working
capital of the Company for the next twelve months.  However,
the Directors are of the opinion that the arrangements
negotiated with its Bankers, which include the timely disposal
of the Company's assets, allow for a restructuring and
refinancing to take place with adequate working capital being
made available by an equity issue or debt raising exercise in
the Spring of 2000.

Comments on the current trading and prospects for the Company
are contained in the interim statement in respect of the six
months ended 31 August 1999 attached to this announcement and
since the date of the interim statement trading has continued
in line with those comments.


    

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