Engineering group Unidare, whose profits are expected to plunge in the current year, is carrying out a major restructuring of its manufacturing businesses in the UK and continental Europe to generate net cash of €4.3 million (£5.5 million). This will result in a modest improvement in Unidare's balance sheet which is expected to show net debt at end September of €39.5 million.

Unidare signalled last March it planned a major strategic review of its businesses. This review has resulted in the sale of one loss-making business, the closure of another and the relocation of its Daalderop water heating business. Together the three transactions will boost shareholders' funds by a net €2.1 million.

The unprofitable Unidare Benelux business, a wholesaler of welding and gas control products, is being sold to its managing director for a nominal sum. The deal will result in a net cash outflow of €1.8 million and an exceptional loss of €4.5 million after €1.1 million of goodwill.

In the UK, Unidare is ending manufacture of gas cutting and welding equipment and this is being transferred to its Eland Electrical operation. "We no longer find it commercially viable to manufacture these products in the UK due to intense competition from eastern Europe and Asia," said Unidare chief executive Mr Paul Duggan. The withdrawal from manufacturing will result in an exceptional loss of €5.5 million after charging €2.2 million of goodwill previously written off.

The Daalderop operation in Holland is to relocate from its current location in the town of Tiel to a greenfield site close to the current location. Unidare said the relocation was essential to Daalderop's continued growth.

The restructuring had little impact on Unidare shares, which were unchanged on €1.20, close to a 10-year low.