RE: Rns £1.6m asset sale2 May 2019 17:07
Sorry £1m
2 May 2019
7digital Group plc
("7digital" or "the Company")
7digital agrees sale of Denmark assets to TDC
7digital (AIM:7DIG), the global leader in B2B end-to-end digital music solutions, announces the sale of select technology from the Company and its Denmark subsidiary ("7digital ApS") and transfer of staff to TDC Group/ TDC A/S ("TDC") (the "Transaction"). TDC Group is the largest telecommunications company in Denmark.
The Board believe this Transaction will be mutually beneficial to both 7digital and TDC. The Transaction passes control of the Company's bespoke technology, and the resources to maintain it, to TDC. This technology was used by only one customer and had become unprofitable for the Company to maintain. The annual losses to be eliminated from the business total around £1.6m at the current run rate and the net value of the assets being sold was approximately £0.9m as at December 2018. This transaction means that 7digital can now focus its resources on its productised, cloud-hosted technology which is already used by many customers globally.
The consideration for the Transaction is €1.375m in cash, of which €1.0m was paid to 7digital at completion. The remainder of the cash consideration will be retained by TDC to cover certain potential liabilities and released by TDC to the Company by no later than 31 January 2020 to the extent that it is not required to meet such liabilities. The consideration is subject to customary post-closing adjustments. The cash will be used for general working capital.