Redcentric PLC Disposal of fibre networks (7410K)
September 26 2016 - 1:00AM
UK Regulatory
TIDMRCN
RNS Number : 7410K
Redcentric PLC
26 September 2016
26 September 2016
Redcentric plc
("Redcentric", "the Company" or "the Group")
Disposal of Cambridge, Portsmouth and Southampton fibre
networks
Redcentric plc (AIM:RCN), a leading UK IT managed services
provider, is pleased to announce the disposal of its metropolitan
area fibre networks in Cambridge, Portsmouth and Southampton to
CityFibre Infrastructure Holdings Plc (AIM:CITY, "CityFibre") for a
total consideration of GBP5.0m, in line with book value, paid in
cash on completion.
As part of the transaction, CityFibre have also acquired unlit
network and ducting from Redcentric in Nottingham, Derby,
Northampton and Newbury. Redcentric have signed a network access
agreement with CityFibre to provide seamless access to the network
in support of its customers, who remain with Redcentric and are
unaffected by the disposal.
The network access agreement, which has a ten year duration,
with minimum levels of annual commitment, which reduce over time.
The expected impact on Redcentric is incremental net cash costs of
approximately GBP0.5m per annum initially, although this is offset
by reduced depreciation and interest charges meaning that the
transaction is earnings neutral. The transaction strengthens
Redcentric's balance sheet, and provides further flexibility for
future investment.
Fraser Fisher, Chief Executive Officer of Redcentric,
commented;
"This disposal is in line with our strategy of control over our
customer affecting core assets while not tying up capital where
ownership is unnecessary. This mirrors our Datacentre approach
where the physical buildings are held on long leases rather than
freeholds but we retain complete control of the assets. We will
continue to service customers in Cambridge and Portsmouth exactly
as before, and expect to generate additional revenues and network
efficiencies over time as a result of our developing relationship
with CityFibre."
Enquiries:
+44 (0)1423 850
Redcentric plc 000
Fraser Fisher, Chief Executive
Officer
Tim Coleman, Chief Financial Officer
Numis Securities Limited - Nomad +44 (0)20 7260
& Joint Broker 1000
Simon Willis / Oliver Hardy /
Ben Stoop
+44 (0)20 7220
finnCap Ltd - Joint Broker 0500
Stuart Andrews / Rhys Williams
MXC Capital Markets LLP - Financial +44 (0)20 7965
Adviser 8149
Marc Young / Charlotte Stranner
+44 (0)20 7353
Tulchan 4200
James Macey White / Matt Low
This information is provided by RNS
The company news service from the London Stock Exchange
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