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Nuplex plans to sell Australian underperformer


Thursday 24th October 2002

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New Zealand-based chemical and waste management company Nuplex Industries is to sell two Australian businesses, one of which has failed to perform as hoped.

Nuplex is negotiating the sale of Medihold International 3 Pty Ltd and Daniels Sharpsmart Australia Pty Ltd, a joint venture handling sharp instruments, to Australian medical waste processor Steriocorp Ltd.

The deal is subject to due diligence and legalities.

"Stericorp have advised Nuplex that they are well advanced with their due diligence process," Nuplex said.

Nuplex bought Medihold and Daniels almost two years ago but Medihold's troubles almost immediately became clear when it lost an important waste management contract with New South Wales public hospitals.

As a consequence Nuplex wrote down $11.9 million on Medihold last year , blaming incomplete information during the purchase process.

The writedown -- nearly half Medihold's purchase price -- forced Nuplex to restate its June 2001 year profit down to $1.3 million from the $13.2 million previously anticipated.

"I guess you could say it lost our interest and was becoming a bit of a management diversion," Nuplex chairman Fred Holland told NZPA.

Medihold had picked up some business since losing the hospital contracts but "it was a long road ahead of us".

A final price had not been negotiated.

Mr Holland said that Nuplex would continue to use the New Zealand part of the sharps recycling venture which is part of its New Zealand Environmental Services arm.

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