Astron Limited will sell its Chinese-based zirconia materials business to Imerys SA, a French multi-national minerals processing company for a total cash payment of about Aus$220 million.

The figure comprises a RMB1.25 billion (Aus$201 million) purchase price plus an estimate of closing adjustments for cash, debt and working capital.

The combined value of the sale proceeds and Astron's existing Aus$13 million in cash and financial assets totals about Aus$233 million.

Astron will also be entitled to earn-out payments based on the performance of the divested zirconia materials business for the two financial years ending 30 June 2009.

Astron managing director Alex Brown says: "The price reflects the future value we could achieve from operating these businesses on a stand alone basis. In addition the time is right for Astron to divest these assets and focus our strategy on the higher value and growth opportunities attainable from minerals production and in titanium dioxide."