Textron To Take Additional Charge for TFS Sale

Jason Sandefur

Textron expects to record an additional impairment charge of $75 million to $150 million in the second quarter of 2006 related to its efforts to sell Textron Fastening Systems.
“As a result of the offers received from potential purchasers of substantially all of the business of the segment, and the additional obligations that Textron now estimates will need to be settled as part of the sale, Textron determined that the net assets of discontinued operations related to [TFS] may exceed the fair value less costs to sell,” Textron stated in its quarterly Security and Exchange Commission filing.
Textron acknowledged that “formal” negotiations have been commenced with several potential buyers, and that specific terms have been discussed, including “the assumption of liabilities.”
TFS has been listed as discontinued operations since the fourth quarter of 2005, when Textron declared its intention to sell its fastener manufacturing business. Textron recorded a $53 million charge for listing TFS as discontinued operations. Web: textronfasteningsystems.com �2006 FastenerNews.com