LONDON (Alliance News) - IDE Group Holdings PLC said Monday it has completed its strategic and operational review, resulting in a GBP3.0 million management buyout of subsidiary 365 ITMS Ltd.
The software & computer services company has split back into three component parts - the original acquisitions made by the company - with a view to "potentially disposing of one or more" of these component parts.
As a result, IDE Group has sold 365 ITMS to PTCA Newco Ltd - a new incorporated company owned by some members of the 365 ITMS management team - on a cash free, debt free basis.
The GBP3 million consideration for the sale will be payable in cash. The proceeds will be used to reduce IDE Group's net debt.
MXC Guernsey Ltd, a wholly owned subsidiary of MXC Capital Ltd, IDE's largest shareholder, has provided funding to the management buyout team to complete the sale. MXC confirmed separately that it has provided a GBP3 million loan to the team. The three-year loan carries a 12% interest rate and is interest-only for the first year.
IDE said there are "no ongoing discussions" about disposing its remaining two businesses, IDE Group Manage Ltd, which provides outsourced IT services, and IDE Group Connect Ltd, which provides network services and data centre hosting services.
IDE Group said it is "focused on right-sizing" the company to "enable it to trade profitably".
The company said: "There is further work to be done in order to achieve this which is currently being undertaken but the board believes that this is the best option for the group to enable it to recover the value that has been lost."
In September, the company reported that, for the six months ended June, pretax loss widened to GBP39.4 million from GBP1.6 million the year prior. First half revenue slipped to GBP28.7 million from GBP29.6 million a year before.
To aid the company's restructuring, Non-Executive Chairman Andy Parker will move to executive chairman, effective immediately.
IDE Group said it will look to add an independent non-executive director to the board in the coming months. It also expected that Parker will revert back to non-executive chairman when the company has completed its restructure.
Shares in IDE Group were untraded Monday 2.50 pence each.