Cornerstone FS plc (AIM: CSFS), a foreign exchange and payments solutions company offering multi-currency accounts to businesses and individuals through its proprietary technology platform, is pleased to announce that it has entered into a share purchase agreement (“SPA”) for the sale of its non-trading subsidiary, Capital Currencies Ltd (“Capital Currencies”), which is authorised and regulated by the Financial Conduct Authority (“FCA”) as an authorised payment institution (“API”), for a consideration of £150,000 to be paid in cash on completion.
The Company acquired Capital Currencies in February 2022 to accelerate the Group’s growth and its transition to a direct customer base as Capital Currencies’ focus was on providing high-level currency exchange and international payments services directly to larger UK-based SMEs. All of Capital Currencies’ customers were subsequently transferred to the Cornerstone technology platform and its staff became employees of the Group following the acquisition, such that Capital Currencies has not been a trading entity since November 2022. In addition, the Group’s primary operating subsidiary, Cornerstone Payment Solutions Ltd., is authorised and regulated by the FCA as an authorised electronic money institution, which gives the Group more extensive regulatory permissions than the more limited API licence held through Capital Currencies.
Accordingly, the Board believes that it is in the best interests of the Company to realise the value of this non-core asset through its disposal to a non-competing entity. The proceeds from the sale of Capital Currencies will be used to strengthen the Company’s existing cash resources.
Completion of the SPA, and receipt of the £150,000 cash proceeds, is conditional upon receipt of regulatory approval from the FCA.
James Hickman, CEO of Cornerstone, said:
“This is a great outcome for Cornerstone, generating value from the sale of a licence, that is surplus to our requirements, to a non-competing business. As with the sale of our Avila House subsidiary at the start of the year, which was acquired for its small e-money licence, this transaction also demonstrates the importance of payments and e-money registrations and the value that purchasers place on them. As we noted in our recent interim results, we had an excellent first six months of the year with that momentum continuing into H2, and this additional £150k, when received, will further strengthen our cash position.”