CPPGroup Plc Disposal of Mexican legacy business (6278D)
October 21 2022 - 2:00AM
UK Regulatory
TIDMCPP
RNS Number : 6278D
CPPGroup Plc
21 October 2022
21 October 2022
CPPGroup Plc
("CPP Group", the "Group" or the "Company")
Disposal of Mexican legacy business
CPP Group (AIM: CPP), a provider of real-time assistance
products and resolution services which reduce disruptions to
everyday life for millions of customers across the world, announces
that it has disposed of its operations in Mexico.
The Group has completed the sale of its wholly-owned
subsidiaries, Servicios de Asistencia a Tarjehabientes CPP Mexico S
de RL de CV and Profesionales en Proteccion Individual S de RL de
CV (collectively "CPP Mexico"), which together comprise the Group's
legacy business in Mexico, to Rafael Ortiz Moran and Silvia Daniela
Rodriguez Gaona (the "Buyers") for a nominal cash consideration of
$1 (Mexican Peso) (the "Disposal"). As part of the Disposal, CPP
Group has left cash balances of circa GBP280,000 in CPP Mexico to
cover initial working capital requirements and other committed
liabilities. Rafael Ortiz Moran is the Country Manager of CPP
Mexico.
CPP Mexico was established to capitalise on the assumed demand
for the Group's legacy protection and assistance services in that
market . However, after a period of limited new business
development and operating losses, CPP Mexico was, in early 2021,
placed into run-off. The natural decline in the book will again see
the business become unprofitable during 2023 and beyond.
Consequently, and in line with the Group's strategy, announced on
19 October 2022, to withdraw from its Legacy Businesses, the Board
believed that an exit from the Mexican market was in the best
interests of CPP Group.
Following a review of its options in the region, the Board
concluded that a sale of the business to the Buyers, rather than a
closure, was the least costly option for CPP Group and the best
outcome for the Group.
For the 2021 financial year, CPP Mexico contributed EBITDA of
GBP0.1 million to the Groups overall EBITDA from continuing
operations of GBP7.5 million and recorded a loss before tax of
GBP0.3 million. The impact of the Disposal will, therefore, not be
material to the Group. As at 31 December 2021, CPP Mexico had net
liabilities of GBP2.6 million.
As Rafael Ortiz Moran is the Country Manager of CPP Mexico, the
Disposal constitutes a related party transaction pursuant to AIM
Rule 13. The Directors consider, having consulted with the
Company's nominated adviser, Liberum Capital Limited, that the
terms of the Disposal are fair and reasonable insofar as the
Company's shareholders are concerned.
Simon Pyper, CEO of CPP Group, commented:
" The disposal of our Mexican business is consistent with the
Group's recently announced strategy to withdraw from its legacy
businesses and migrate CPP to an InsurTech business, one with a
clear purpose and simplified operating model."
Enquiries:
CPPGroup Plc
S imon Pyper , Chief Executive Tel: via Alma PR
Officer
D avid Bowling , Chief Financial
Officer
Liberum Capital Limited
(Nominated Adviser and Sole Tel: +44 (0)20 3100 2000
Broker)
Richard Lindley
Lauren Kettle
Alma PR
(Financial PR Adviser) Tel: +44 (0)20 3405 0205
Josh Royston
David Ison
Kieran Breheny
About CPP Group:
CPP Group is a technology-driven assistance company that creates
embedded and ancillary real-time assistance products and resolution
services that reduce disruption to everyday life for millions of
people across the world, at the time and place they are needed, CPP
Group is listed on AIM, operated by the London Stock Exchange.
For more information on CPP Group visit
https://international.cppgroup.com/
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the
publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
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END
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