Fleetwood Selling Retail Unit

The company sets up a pair of deals with a Berkshire Hathaway unit.
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Fleetwood Enterprises

(FLE)

agreed to sell its mobile-home retail operation to the Clayton Homes unit of

Berkshire Hathaway

(BRKA)

for $74 million.

Riverside, Calif.-based Fleetwood said it would take an asset impairment charge of $51 million on the sale. Fleetwood expects the closing to take place in the second quarter of fiscal 2006.

"Clayton Homes is an industry leader that will be a force in manufactured housing for years to come," said Fleetwood CEO Elden Smith. "They are a well-capitalized company with a quality management team. Clayton is also a good customer of Fleetwood and will be an ongoing partner as they continue to buy Fleetwood products for former FRC locations."

The company is also selling the retail loan portfolio of its manufactured housing finance company, HomeOne Credit, to Clayton's Vanderbilt Mortgage. Fleetwood expects the HomeOne deal to take place at a "slight discount to its carrying value" of around $71 million.

Fleetwood said it expects to record cash charges of $5 million-$7 million in fiscal 2006, and that the deals should result in a slightly positive cash effect for Fleetwood after paying related liabilities.

On Thursday, Fleetwood slipped a dime to $10.10.