The Capita PLC (LON: CPI) share price rose 4.26% after announcing the successful completion of the sale of its travel and events businesses, Agiito and Evolvi, to Clarity Travel Ltd (Clarity) on November 14, 2023. The significant transaction follows the terms initially announced on August 10, 2023, representing a pivotal step in Capita's strategic realignment.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
Clarity has assumed responsibility for the working capital and debt liabilities associated with these businesses as part of the deal. In return, Capita is set to receive cash proceeds of £17 million. Of this sum, £8 million was paid out upon completion, with the remaining £9 million scheduled for payment 12 months after completion.
One notable milestone in completing this transaction is the clearance received under the National Security and Investment Act, ensuring that all regulatory requirements have been met.
Capita's prudent financial management is reflected in its decision to utilise the net proceeds, after accounting for transaction costs, to bolster the company's balance sheet further and reduce existing debt. This move aligns with the company's overarching strategy to optimise its financial position and position itself for future growth and investment opportunities.
Moreover, selling its travel businesses is a significant milestone for Capita's Portfolio. It marks the penultimate step in the series of non-core disposals undertaken by the company, bringing it one step closer to completing its strategic realignment and focusing on its core strengths and growth areas.
In sum, the successful sale of Agiito and Evolvi to Clarity Travel Ltd represents a crucial financial transaction for Capita and a strategic manoeuvre aimed at streamlining the company's operations and improving its financial stability.
With a strengthened balance sheet and reduced debt, Capita is well-positioned to pursue its future endeavours with confidence and determination.
Capita share price.
The Capita share price rose 4.26% to trade at 19.84p from Tuesday’s closing price of 19.03p.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.