API Group has disposed the majority stake of its China-based foil manufacturing unit, Shanghai Shen Yong Stamping Foil, to a subsidiary of its former Chinese partner for $2.8m.
API said the proceeds will be used to pay down the remaining debt of the UK company.
On a fully consolidated basis, the unit recorded operating losses of £2.6m and £2.4m in the twelve month periods to 31 March 2009 and 31 March 2010 respectively.
Losses for the six months to 30 September 2010, amounted to £1.0m.
"Even though sales to the end of September 2010 had seen a dramatic year-on-year jump of 59%, losses for the six months to the end of the period had reduced only marginally to $1m, due to declining margins and the impact of higher raw material costs," API added.
API chief Executive Andrew Taylor said the move marks the company’s exit from China although it would continue to develop its foils business in China, and Asia more generally and the loss-making JV in China will further strengthen the group’s performance.
Continuing operations of the company comprise its European laminated packaging material business, foil manufacturing and distribution operations based in the US, as well as Europe and foils distribution units in the Asia Pacific region.