UPDATE 2-IPTE to sell automation division and rename

Sale for initial 2 mln euros
* To be left with just contract manufacturing business
* To rename itself Connect Group
(Adds details from company statement)
BRUSSELS, Dec 21 (Reuters) - Belgium electronics firm IPTE (IPTE.BR) will sell its loss-making automation division for an initial 2 million euros to two key shareholders in a total transformation of the company, which will be renamed Connect Group.
The sale, subject to shareholder approval in the first quarter of 2010, will be for an initial 2 million euros and further payments dependant on performance until December 2012, the company said in a statement issued on Monday.
IPTE said it would sell the business, which sets up and tests systems for printed circuit boards, to company founder Huub Baren, which currently holds 30.23 percent of IPTE, according to the company's website, and Vladimir Dobosch, which holds 3.71 percent.
The transfer will lead to a one-off loss in the fourth quarter of this year of between 17 million and 18 million euros, IPTE said.
IPTE said last month it was looking at measures to improve its automation division, which had been thrown off course in its expansion plans by the global economic downturn.
IPTE as a whole made a net loss of 6.6 million euros ($9.5 million) in the first nine months of 2009.
The remainder of the company, which is in contract manufacturing, with such customers as Philips Electronics (PHG.AS) and Alstom (ALSO.PA), had 2008 turnover of 166 million euros and, apart from 2001, has been constantly profitable.
IPTE said it planned to change its name to Connect Group, which will remain listed on Euronext.
IPTE said banks had agreed to continue their support after the automation sale. The company plans to reinforce its balance sheet in early 2010 by issuing a subordinated convertible debenture of between 2 million and 5 million euros.
IPTE said it would have the right to share a capital gain if the automation division were sold to a third party within the next two years.
As a guarantee of payments, the acquirers had granted IPTE a call option on their shareholdings at 2.86 euros if the shares were trading at that level or above, or at the highest bid price for the share if the shares were trading below 2.86 euros.
http://www.reuters.com/article/idUSLDE5BK0EQ20091221