Electricals retailer Currys (LON: CURY) is selling is Kotsovolos business and this will move the company into net cash. The share price improved 4.24% to 47.93p, but it is still not much higher than its recent 10-year low. Liberum estimates a sum of the parts valuation of £1.19bn, compared with a market capitalisation of £543m.
Kotsovolos has outlets in Greece and Cyprus, and it is being sold to Public Power Corp for an enterprise value of £175m. Net proceeds are expected to be £156m and pro forma net cash excluding leases for Currys would be around £50m. The business generated 7% of group sales.
Currys will be left with its retail operations in the UK and Nordics. The lower interest charge should offset the loss of profit contribution.
Management plans to discuss pension contributions with the pension trustees in order to reduce the pension deficit and cut ongoing contributions.
Liberum believes that Currys could become a bid target. Currently, the prospective multiple is little more than six.
