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Troubled company Quindell has changed its name to the Watchstone Group (LSE:WTG), presumably in the hope that it can shed its terrible reputation (and possibly bamboozle Google searchers).
But it can’t escape its problems that easily. The company has announced its intention to reduce the company’s share capital, return capital to the shareholders, and consolidate the company’s ordinary shares.
At the time of writing, the share price is 97.75p, which represents a 7.75p premium over the payout price.
The details are as follows:
- In December 2015, approximately £414 million will be returned to shareholders. This money comes from the sale of its Professional Services Division.
- This means that for every fully paid ordinary share of 15p, shareholders will receive 90p in cash.
- Shares will be consolidated so that every 10 1p shares become 1 10p share.
- Shares will then start trading again on 18 December.
This is all subject to the result of a court hearing on 16 December. The deal is only going to be approved if the court believes the newly-named Watchstone will retain enough cash to allow it to meet its future liabilities.
The problem is that the SFO investigation into the company is not going to report for a while, and nobody knows just what that might mean for the company’s future obligations.
There are also several legal actions pending against Quindell/Watchstone from groups of disgruntled shareholders.
All this might put the kibosh on the plans.
