(Adds share rise, profit numbers)
Sept 6 (Reuters) - Turnaround specialist Melrose Industries said on Thursday it had made significant progress in reorganising engineering group GKN since its hostile 8-billion-pound takeover, promising to announce more detailed plans later this year.
Shares in Melrose, which bought the 250-year old company in March after a protracted battle, rose more than 4 percent after it announced results which it said were in line with the board’s expectations.
The company reported a statutory loss of 303 million pounds in the half year to June 30 but said its adjusted profit had risen to 240 million pounds from 131 million pounds.
Reuters reported in July that Melrose was likely to auction off GKN’s power metallurgy business in a sale this month that would attract interest from private equity firms.
Sources also said then that GKN’s new owner was weighing options for its off-highway powertrain unit and wheels business.
Melrose promised in June to give guidance on its future plans for GKN in its first-half results. It said in the report it was undertaking an “extensive review of the GKN assets, liabilities and accounting policies” which would be “finalised and recognised” in the second half of the year.
“All GKN businesses are being managed successfully on a standalone basis, freed from head office bureaucracy and with medium and long-term improvement plans agreed,” Melrose said.
“On taking control in April we immediately removed the GKN head office functions and set about decentralising its businesses in accordance with the usual Melrose approach,” Chief Executive Simon Peckham said in the statement.
Melrose’s motto of “buy, improve, sell” provoked fears among some lawmakers about the security of GKN’s 6,000 British employees and the engineer’s pension schemes during the takeover.
Melrose said it had appointed the first independent chairman to the GKN UK pension schemes and had begun implementing an agreed funding plan to safeguard the interests of pensioners and other members.
Melrose had earlier committed to contribute 150 million pounds to the GKN UK pension plans in the first twelve months of ownership, and ongoing annual contributions of 60 million pounds.
Melrose also committed to contribute 270 pounds million upon the disposal of Powder Metallurgy business, 10 percent of any proceeds from disposals of GKN businesses and 5 percent of any proceeds from non-GKN businesses to the GKN UK pension plans. (Reporting by Justin George Varghese in Bengaluru; editing by Patrick Graham)