Conditional Disposal of IVA B
Accuma Group plc ('Accuma' or 'the Company')
Conditional Disposal of IVA Books for £5.6 million
Accuma Group plc announces that it has, following a strategic review of its operations, conditionally disposed of the Individual Voluntary Arrangement ('IVA') book of Wilson Phillips Limited and the IVA book of Accuma Insolvency Practitioners Limited (together the 'IVA Books').
On 30 April 2009 the Company and each of Wilson Phillips Limited and Accuma Insolvency Practitioners Limited entered into a conditional agreement to sell the respective IVA Books to Grant Thornton UK LLP ('Grant Thornton') for an aggregate consideration of £5.6 million ('the Disposals'), representing a premium to the market capitalisation of Accuma on 30 April 2008 of approximately 93 per cent.
A deposit equal to 5 per cent. of the aggregate consideration has been paid by Grant Thornton with the balance of the consideration being payable in cash on completion of the transaction, which is subject to a long-stop date of 5 June 2009.
The Disposals are deemed to be a disposal resulting in a fundamental change of business for the purposes of Rule 15 of the AIM Rules for Companies and therefore are conditional on approval from shareholders of the Company ('Shareholders'). The Company intends to post a circular to shareholders ('the Circular') seeking such approval and it is expected that the Circular will be posted by 14 May 2009, convening a general meeting ('GM') to be held on or around 1 June 2009.
The Company intends to announce its preliminary results for the year ended 31 December 2008 in the week commencing 25 May 2009. A detailed trading update will be announced on the posting of the Circular.
Information on the IVA books
The unaudited turnover of Wilson Phillips Limited and Accuma Insolvency Practitioners Limited ('the IVA Businesses') for the year ended 31 December 2008 is approximately £5 million, upon which the operating profit is approximately £1 million, before provisions. The net assets of the IVA Businesses at 31 December 2008, including inter-company balances, were approximately £0.5m. The value of future revenues from the IVA Books is in the region of £10.7 million, before provisions for delinquencies. The majority of these revenues are expected to be received over the next three years.
Reasons for and details of the Disposals
The Board identified on 18 September 2008 that the level of new IVA cases was significantly below the numbers achieved in prior periods, partly due to the general market conditions affecting the numbers of IVAs approved by lenders and partly due to the streamlining of the division. However, the IVA Books remain well run and profitable businesses that have attracted interest from a number of parties. It has been well reported by the Company and our listed peers that operating a successful direct marketing IVA business with acceptable profit margins in the face of increasing costs of case acquisition and reduced fee levels has become increasingly difficult.
Following a thorough strategic review the Board has concluded that it should divest the IVA Books as the public equity markets are not ascribing a fair value to these businesses. The Board believes that the consideration offered by Grant Thornton is a fair one for Shareholders and will place the group in a very strong net cash position post completion of the Disposals.
Following the Disposals, Accuma will retain one principal business, Byrom & Keeley ('B&K') which provides debt management services. Given the decrease in the size of the group due to the Disposals, it is expected that B&K will be relocated to more appropriate premises.
The direct costs related to the Disposals are anticipated to be approximately £300,000, and accordingly the net proceeds are expected to be £5.3m. The funds realised from the Disposal will be retained by the Company whilst it considers strategic options available to it and the best way of delivering shareholder value. In addition to the direct costs of the Disposals, the Company has agreed with its principal landlord to make certain payments to relinquish its leasehold interests in 18,000 square feet of office space in Manchester city centre. Together with certain tax liabilities associated with the Disposals, these total approximately £2.6m.
by not later than 5 p.m. on 5 June 2009.
A Circular will be posted recommending shareholders vote in favour of a resolution which will be materially in the form set out below:
'For the purposes of Rule 15 of the AIM Rules for Companies issued by the London Stock Exchange plc, the disposal of the business and certain of the assets of the Company's wholly-owned subsidiaries, Wilson Phillips Limited and Accuma Insolvency Practitioners Limited, (details of which will be contained in the circular to shareholders of the Company which will be posted by 14 May 2009) be and is hereby approved.'
In addition, the Circular will include a recommendation from the Board which will be materially in the form set out below:
'Recommendation
The Directors believe the proposed Disposals to be in the best interests of the Company and Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolution to be proposed at the GM as they have irrevocably undertaken to do so in respect of their own beneficial holdings of 7,146,500 Ordinary Shares, representing approximately 21.9 per cent of the Company's issued ordinary share capital.'
The Notice of the General Meeting and the Circular posted to Shareholders will be available on the Company's website at www.accumair.com
For further information please contact:
|
Accuma Group plc Charles Howson, Chief Executive |
+44 (0)161 751 6787 |
|
FinnCap (Nominated Adviser and Broker) Marc Young / Geoff Nash |
+44 (0)20 7600 1658 |
|
Bankside Consultants Simon Rothschild/Oliver Winters |
+44 (0) 207 367 8888 |
This information is provided by RNS
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