Further to its statement of 8 August 2008, the Board of Payzone is pleased to announce that it has reached an agreement to sell Payzone's French, Italian and Spanish businesses to LCom (100% subsidiary of Proximania), a French company specialising in Airtime product distribution.
The gross consideration for all three disposals is €20m (excluding fees), of which €13.2m is payable in cash and €6.8m by way of assignment of financial guarantees. In addition inter-company balances of €4.2m owed to Payzone are being written off as a result of the transaction.
Completion is expected to occur on 31st October 2008, subject, inter alia, to competition approval in France. Payzone will use the majority of the cash proceeds raised by the disposals to pay down debt. The remainder will be retained by the Company.
The total net liabilities within the French, Italian and Spanish Payzone businesses were valued at a total of €3.6m as at 31 August 2008 (excluding goodwill held by Payzone plc of approximately €26m) and these businesses contributed a €0.6m loss to Payzone's pre-tax profits for the nine months to 30 September 2007.
Payzone France, Spain and Italy have aggregate annual total transactions of approximately €650m.
Mike Maloney, Chief Executive, said: 'This is great news for Payzone. France, Italy and Spain were not part of our strategic focus on growth. By completing their disposal the management can concentrate resources on Payzone's key business. This represents an important step forward in our strategy to focus on those markets that offer significant scale and growth for our services.'
Laurent Troude, Chairman of LCom said: 'The integration of Payzone France, Spain and Italy will allow LCom to accelerate its development of the Airtime products market in France. It will also enable LCom to establish a significant presence in Spain and Italy, which we consider to be high potential markets for the distribution of prepaid phone cards.'