26th Nov 2015 08:52
LONDON (Alliance News) - Management Consulting Group PLC on Thursday said it has now reached a binding agreement with French consultant Solucom SA to sell part of its Kurt Salmon business, warning the loss it will take on the sale will mean it will not be able to pay its interim dividend.
The company, which flagged the talks on Monday, said it has now reached a deal to sell the Kurt Salmon businesses in France, Belgium, Luxembourg, Switzerland and Morocco, along with certain related operations in the US, to Solucom for EUR84.0 million in cash.
Management Consulting said the deal will rebalance it portfolio in geographic terms, reducing its exposure to the tough French market and refocusing it on North America and Asia. It said the remaining Kurt Salmon consulting business will focus on the retail and consumer goods industries, along with its US healthcare business.
The company confirmed, however, as also flagged on Monday, that the loss it will book on the sale of the assets will hit its distributable reserves and will mean it will not be able to pay the interim dividend of 0.23 pence per share it declared in July. The company said it will review its position after the disposal completes and said it is likely it will seek to restructure its reserves in order to allow it to pay dividend payments in the future.
"We are pleased to have progressed to a binding agreement with Solucom to dispose of certain operations of Kurt Salmon. This disposal will significantly reduce group indebtedness and create a business with a more balanced portfolio in geographic terms, focused on growth markets," said Alan Barber, Management Consulting's chairman.
Shares in Management Consulting were untraded on Thursday, having last traded at 14.50 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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