Catalist Partners, one of Countrywide’s largest shareholders, is opposing the estate agency firm’s plans to sell part of the business to venture capitalist Alchemy Partners, labelling it ill-judged and destructive.
Countrywide this morning said it sell between 50.1% and 67.7% of the share capital of the business to Alchemy for as much as £90m as part of a recapitalisation of the business.
The firm has seen losses mount, with its pre-tax loss for the six months ended 30 June topping £44m compared with a £38.4m loss during the same period in 2019. Group income fell by 28% to £173.8m, down from £241.6m in 2019.
It said the sale to Alchemy would provide the company with the “greatest certainty” for its future, allowing it to repay £50m of debt and grow the business.
A spokesman for Catalist said: “Catalist Partners notes Countrywide’s announcement this morning. As one of the company’s largest shareholders, Catalist strongly opposes this unnecessary, ill-judged and dilutive transaction which, while clearly a very attractive deal for Alchemy, is destructive for shareholders and only serves to fund the continuation of a flawed ‘back-to-basics’ business plan.”
Countrywide, which owns Lambert Smith Hampton and has been unsuccessfully trying to offload the brand for sometime, said it was at “a critical inflection point” and was in “urgent need of recapitalisation” to reduce its “excessive debt” burden. It has been trying to complete a turnaround of this business since March 2018 and said its needs “significant capital investment” to achieve its strategic goals.
Shares in the business dropped by more than 15% to 155.1p following the announcement of the recapitalisation this morning.
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