30th Apr 2019 14:56
LONDON (Alliance News) - Imperial Brands PLC confirmed on Tuesday it intends to sell its premium cigar business.
The sale is part of a disposal programme - expected to generate proceeds of up to GBP2 billion by May 2020 - which aims to release capital in order to pay down debt and invest in the tobacco company's growth, as well as supporting Imperial's "simplification agenda".
"Premium Cigars has performed well over a number of years with good revenue and profit growth; however, it is a unique luxury business with a different consumer base and route to market relative to Imperial's other businesses," the FTSE 100-listed tobacco major said on Tuesday.
Thus, the sale of the unit provides an "attractive opportunity" to realise shareholder value. The company didn't provide any financial figures for the cigar business on Tuesday and doesn't break it out in its annual accounts.
However, Imperial did caution that although it is considering "various options" for Premium Cigars, there can be no certainty that any transaction will take place.
Significant progress has been made with a number of other sale opportunities, the company said, though acknowledged that tobacco valuations have "come under some pressure" in the past year. Assets will be sold only if they realise "appropriate value", the firm emphasised.
Shares in Imperial Brands were down 0.1% at 2,425.00 pence on Tuesday following the announcement.
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