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Melrose Industries Shares Dip After Overheating Issue at US Facility

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Melrose Industries Shares Dip After Overheating Issue at US Facility

Shares of Melrose Industries (MRO.L) fell in early Tuesday trading in London after an overheating issue involving a storage tank at unit GKN Aerospace's Garden Grove facility in California, US, prompted an evacuation over the weekend.

Melrose said Tuesday that specialists and local authorities have been working to stabilize the situation, with positive progress made over the past few days. The aerospace and defense company also confirmed, citing local authorities, that no injuries, leaks, or contamination have occurred, adding that GKN is working with customers on operational recovery and supply plans.

Shares in Melrose fell as much as 7% in early trading before recovering slightly to trade down around 5%.

The issue was first identified on May 21 and involved a tank containing methyl methacrylate, which is used in the manufacturing of high-strength aerospace acrylic materials.

The following day, the Orange County Fire Authority ordered a precautionary evacuation in parts of the surrounding area. The evacuation area was scaled back as of 6 pm local time on Monday after the risk of a "massive explosion" was eliminated.

California Governor Gavin Newsom declared a state of emergency in Orange County to support ongoing emergency response operations, and on Monday, US President Donald Trump approved a federal emergency declaration.

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