Listed plastic components manufacturer Carclo has agreed a deal to sell the Czech arm of its struggling Wipac business.

The Ossett-based group has been incurring significant losses from its LED Division and is attempting to secure a sale of Wipac, the main arm of this part of the company.

Carclo has now secured the sale of Wipac Czech to Magna Automotive Europe for a total consideration of €1.1m (£943,000).

Wipac Czech designs and develops automotive lighting, historically acting as a sub-contract engineering resource for the main Wipac business in Buckingham, UK.

The business reported operating profits of €100,000 for the year to 31 March 2019 and had gross assets of €900,000 at the period end.

The purchase price comprises €800,000 in cash and the assumption of €300,000 of outstanding liabilities. The proceeds will be used to reduce the outstanding net indebtedness of the group. The transaction is expected to complete on 26 November 2019.

Carclo said discussions over the sale of principal Wipac UK business remained ongoing, with negotiations now at an advanced stage with a single party. However, it added that there was "no certainty that a successful sale of this business will occur nor as to the terms or structure of any such transaction".