July 20, 2017 / 12:05 AM / a year ago

UPDATE 1-Australia's Ansell announces $100 mln restructuring after condom biz sale

(Adds company comments, restructuring details, background)

July 20 (Reuters) - Australian rubber products maker Ansell Ltd announced writedowns and a restructuring on Thursday following the sale of its flagship condoms business two months ago.

Ansell said it will spend $70 million to $100 million over three years to reorganise its supply chain, merge its single-use and medical divisions into a “healthcare” unit and find other cost savings.

It also announced non-cash asset write downs of $20 million to $30 million related to the closure of some “smaller, less efficient” production lines.

The company said it aims to have “a sharper focus on core businesses selling to industrial and healthcare end markets,” since the sale of its retail-focused sexual wellness division.

About $40 million to $50 million spent on restructuring will go toward a cost-cutting project expected to deliver pre-tax savings of $30 million per year by 2020, Ansell said in a statement. The rest of the money will be spent on new manufacturing technology and growing production capacity.

Ansell in May sold its oldest division, which produced condoms, for $600 million to China’s Humanwell Healthcare Group Co Ltd and CITIC Capital China Partners.

The sale is expected to close by the end of September, and a previously announced $265 million share buyback will proceed with the rest of the proceeds spent on debt reduction, Ansell said. ($1 = 1.2566 Australian dollars) (Reporting by Susan Mathew in BENGALURU; Editing by Tom Westbrook and Christopher Cushing)

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