XCH.L Regulatory News (XCH)

27 September 2011

Xchanging plc

WINDING DOWN OF RESIDUAL

US WORKERS' COMPENSATION BUSINESS

Xchanging plc ('Xchanging'), the business process and technology services provider and integrator, announces that the residue of Cambridge Integrated Services Group Inc. ("CISGI") will now be wound down by means of voluntary insolvency. The Board of Directors of CISGI has elected to put CISGI into an Assignment for the Benefit of Creditors ("ABC process"), effective on 26 September 2011, and assigned all of its assets and liabilities to Lawrence M Adelman, as the CISGI insolvency trustee.

CISGI sold its US workers' compensation business and third party administration operations on 31 May 2011 to Sedgwick Claims Management Services, Inc for £13.6 million. The sale included virtually all the contracts, assets, employees, current liabilities and future service obligations of CISGI, leaving certain residual liabilities and non-operational assets in the remaining legal entity.

As a result of the ABC process Xchanging will initially recognise an exceptional non-cash accounting loss related to the disposal of a discontinued operation of approximately £7.3 million (of which £3.3 million relates to net exchange losses previously charged to reserves which now have to be re-cycled through the income statement), which will be set against the profit on disposal of a discontinued business reported at the half year of £13.4 million. On completion of the process there may be a recovery of some value to Xchanging, as a creditor of CISGI, which will be reported as an exceptional item at that time. There is no requirement for any future funding of the ABC process by Xchanging.

Enquiries

Xchanging plc Tel: +44 (0) 207 780 6999

Ken Lever, Chief Executive

Maitland Tel: +44 (0) 207 379 5151

Neil Bennett

George Hudson

Emma Burdett

About Xchanging

Xchanging is a business process and technology service provider and integrator specialising in Financial Services, Insurance Services, Technology and Procurement, with processing skills and capabilities applicable to other vertical industry and market sectors.

www.xchanging.com 

Cautionary Statement: 

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Xchanging's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approval or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.