(Alliance News) - Countrywide PLC said Friday it will sell its commercial real estate consultancy and transactional business Lambert Smith Hampton Ltd for GBP38 million in cash.
The UK estate agent also announced a share consolidation on the basis of 1 new share for every 50 existing shares. The reduction in the number of overall issued shares is expected to improve market liquidity by reducing the volatility and spread.
Shares in Countrywide - which is headquartered in Milton Keynes - were 16% higher at 5.40 pence on Friday in London.
Countrywide will sell Lambert Smith Hampton to John Bengt Moeller, who is chair of Great Global Holdings Ltd, a holding company for several UK and international companies.
Both the sale and the share consolidation is subject to shareholder approval at an upcoming general meeting. If approved, the transaction is expected to be completed on December 31.
The sale itself is expected to improve Countrywide's capital structure, and proceeds from the sale will allow the group to materially reduce its net debt.
In addition, Countrywide on Thursday agreed to an amended credit facility with its lenders, which includes provisions for a minimum facility of GBP95 million until September 2022.
The new credit facility is expected to provide Countrywide with enough financial flexibility to carry out its turnaround plan while operating in a challenging market environment.
"The sale of the Lambert Smith Hampton commercial business strengthens the group. Once completed, we believe that the group will be in a more advantageous position in our core residential market. The group remains on course to deliver a full year result in line with the board's expectations," said Executive Chair Peter Long.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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