Cppgroup Regulatory News (CPP)

21 July 2022

CPPGroup Plc

("CPP Group", the "Group" or the "Company")

Related Party Transaction

CPP Group (AIM: CPP), a provider of assistance and insurance products, which reduce disruptions to everyday life for millions of customers across the world, has entered into amended arrangements with the founders of Globiva Services Private Ltd ("Globiva").

The Group holds a 51% majority interest in Globiva, a Business Processes Management company incorporated in India, with the other 49% of the shares beneficially owned by the three founders of Globiva, Navneet Gupta, Vikram Singh Nathawat and Ashish Goyal, who continue to manage the business (the "Globiva Founders"). Globiva's results to 30 June 2022 are in line with expectations and ahead of prior year comparatives, with the business benefiting from improved trading conditions and notable new client wins.

Following an internal review and discussions with the Globiva Founders, the Board considers that the Shareholder Agreement ("SHA") signed in September 2018 included unrealistic commitments from the Group for the utilisation of Globiva's call-handling capacity; performance targets which it is now unable, and would never have been able, to satisfy. As a result, the Group has agreed to amend the SHA and certain other arrangements, as further set out below. 

CPP will provide additional funding of £0.5 million to Globiva through an existing repayable interest-bearing loan facility, which will be utilised to provide a one-time compensation payment to the Globiva Founders. Subsequently the balance on the repayable loan from the Company to Globiva will stand at circa £1.7 million, however, there are circumstances in which the Company may consent in the future to waive the amounts due.

The SHA further entitled, upon achievement of certain performance targets, the Globiva Founders to either a cash payment or to buyback 10% of the ordinary shares in Globiva from CPP Group, at the discretion of the Company. Under the amended arrangements, the Globiva Founders will, on meeting performance targets, buyback 10% of the ordinary shares in Globiva from CPP Group, however, in the normal course of business, it has been agreed this cannot be triggered until 1 January 2026 at the earliest.

The compensation payment to the Globiva Founders, who are also Directors of Globiva, along with the other arrangements described above, constitute a related party transaction under AIM Rule 13. The Directors of CPP Group consider, having consulted with the Company's nominated adviser, Liberum Capital Limited, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Simon Pyper, CEO of CPP Group, commented:

"The agreement we have reached with Globiva strengthens our relationship and provides a sound footing on which the business can continue to grow strongly and to the benefit of all parties." 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

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About CPP Group:

CPP Group is a technology-driven assistance company that creates embedded and ancillary real-time assistance products and resolution services that reduce disruption to everyday life for millions of people across the world, at the time and place they are needed, CPP Group is listed on AIM, operated by the London Stock Exchange.

For more information on CPP visit https://international.cppgroup.com/