FRENCH CONNECTION GROUP PLC
Further re. disposal of the Nicole Farhi business
11 January 2012
Under the terms of a Sale and Purchase agreement dated 15 March 2010 (the "2010 SPA") made among French Connection Group plc ("the Company"), NF Fashion Ltd and OpenGate Capital, LLC ("OpenGate") in relation to the disposal of the Nicole Farhi business the Company was entitled to a consideration of up to £5.0 million. The consideration included Deferred Consideration based on the cash flows of the Nicole Farhi business and any proceeds from any subsequent sale of a majority stake in the business.
OpenGate has today entered into an agreement with Kelso Place Asset Management LLP ("Kelso Place") under which Kelso Place has made a significant investment in Nicole Farhi alongside OpenGate.
As a result of this, the Company will receive £400,000 from OpenGate on, or before, 31 January 2013. Further, the Company has been granted a call option by OpenGate over a 5% interest in the Nicole Farhi business exercisable for nominal consideration.
Since March 2010 the Company has received £1.6 million in consideration payments in relation to the 2010 SPA. The payments referred to above will bring the total cash consideration achieved for the disposal of the Nicole Farhi business to £2.0 million. Other than the arrangements described above, the Company will receive no further Deferred Consideration.
As part of this arrangement the Company has agreed to extend certain of the Transitional Services in support of the Nicole Farhi business for a period of twelve months. All Transitional Services utilised will be paid for by NF Fashion Ltd.
Roy Naismith French Connection +44(0)20 7036 7036
Kim Fletcher/Catriona McDermott Brunswick +44(0)20 7404 5959
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