Management Consulting Group PLC Update on escrow funds (3749M)
April 27 2018 - 4:16AM
UK Regulatory
TIDMMMC
RNS Number : 3749M
Management Consulting Group PLC
27 April 2018
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014 (the "Market Abuse
Regulation").
27 April 2018
Management Consulting Group PLC
Update on the Kurt Salmon escrow funds
Further to the announcement on 23 April 2018, Management
Consulting Group PLC (the "Group") provides the following update on
the Kurt Salmon escrow funds.
As previously announced, several of the Group's businesses,
including Kurt Salmon in Europe, were disposed of through a series
of transactions in 2015 and 2016. The Group has continued to manage
the residual activities and contingent liabilities related to this
disposal programme and which are reported in Discontinued
Activities in the Group's financial statements.
A material aspect of this process has been the negotiation of
the release of funds held under the escrow arrangements which
guarantee certain contingent liabilities relating to the disposal
of parts of the Kurt Salmon business to Wavestone in 2016 (the "KS
Escrow Funds"). The KS Escrow Funds represent approximately GBP6m
of the Group's total cash resources of GBP16.1m as at 31 March
2018. Under the terms of the sale agreement, the KS Escrow Funds
were due to be released in two equal tranches on 7 January 2018,
upon expiry of an initial guarantee period, and on 7 July 2018,
being the final expiry date of the guarantees. However, securing
the release of the first tranche of the KS Escrow Funds has taken
longer than we expected due to negotiations over the treatment of
certain potential indemnification claims. As a result, final
agreement as to the first tranche was reached yesterday evening
with Wavestone with an amount of approximately EUR2 million
(approximately GBP1.7 million) being released to the Group while
the balance of approximately EUR2 million (approximately GBP1.7
million) remains in an escrow arrangement until the potential
indemnification claims have been agreed or finally determined on a
case by case basis. The continuing escrow arrangement for the
remaining approximately EUR4 million (approximately GBP3.5 million)
ends on 7 July 2018 (as previously agreed).
While the Board remains confident as to the Group's overall
position in terms of the claims raised to date by Wavestone, and so
expects to secure the release of the remaining outstanding KS
Escrow Funds progressively, the Board believes a degree of
uncertainty still exists as to the timing of the remaining KS
Escrow Funds being released to the Group in the second half of
2018.
The Board will provide further updates on these matters as
appropriate.
Management Consulting Group PLC
Tel: +44 20 7710 5000
Nick Stagg, Chairman and Chief Executive
Market Abuse Regulation
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulation. Upon the publication of this announcement
via a regulatory information service, this inside information is
now considered to be in the public domain.
The person responsible for arranging for the release of this
announcement on behalf of the Group is Nick Stagg, Chairman and
Chief Executive.
Forward-looking statements
Certain information contained in this announcement constitutes
forward looking information. This information relates to future
events or occurrences or the Company's future performance. All
information other than information of historical fact is forward
looking information. The use of any of the words "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "project",
"should", "believe", "predict" and "potential" and similar
expressions are intended to identify forward looking information.
This information involves known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ
materially from those anticipated in such forward looking
information. No assurance can be given that this information will
prove to be correct and such forward looking information included
in this announcement should not be relied upon. Forward-looking
information speaks only as of the date of this announcement.
The forward looking information included in this announcement is
expressly qualified by this cautionary statement and is made as of
the date of this announcement. The Group does not undertake any
obligation to publicly update or revise any forward looking
information except as required by applicable securities laws.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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