REG - CPPGroup Plc - Related Party Transaction

CPPGroupAnnouncement

21/07/2022 07:00

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RNS Number : 2039T  CPPGroup Plc  21 July 2022

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.

 

Enquiries:

 CPP Group plc
 Simon Pyper, Chief Executive Officer    via Alma PR
 David Bowling, Chief Financial Officer

 Liberum Capital Limited
 (Nominated Adviser and Sole Broker)     Tel: +44 (0)20 3100 2000
 Richard Lindley
 Lauren Kettle

 Alma PR
 (Financial PR Adviser)                  Tel: +44 (0)20 3405 0205
 Josh Royston
 David Ison
 Kieran Breheny

 

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/
(https://international.cppgroup.com/)

 

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