Group says equity swap does not mean they will have to issue new shares
Quindell has responded to share price turbulence to reaffirm the belief it has in the strength of its business.
In a statement, Quindell said the turbulence was “not related in any way to the performance of the underlying business”.
Quindell said: “The board is aware of continuing press speculation regarding the equity swap and an active short position in relation to the company’s ordinary shares. The active shorters have also called into question the quality of the group’s debtors in relation to its outsourcing business as other companies in this sector have had issues in this area.
“In light of this, the board wishes to provide further clarification that following its recently reported results, the group has a strong balance sheet, good debtor controls and continues to trade profitably with significant traction in the insurance sector.”
Quindell said that the equity swap was only £13.3m of the £202.3m receivables as at the end of 2012 and was not “material” to the group. The company also confirmed that it had received £146.8m of the remaining receivables since the end of last year including £19.8m for the deposit payment for Accident Advice Helpline.
The company said that there was no need for Quindell to issue new shares or pay out further cash as a result of the equity swap and that the swap had already been included in EPS calculations.
Concluding the statement, Quindell said: “The group has a strong balance sheet, excellent debtors control, more than sufficient funding and no reliance on receiving any further cash from the equity swap to be able to fund its growth to meet market expectations in 2013 and beyond. The directors are not aware of any valid reason for the recent share price drop other than misinformed speculation and shorting activity.”
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