Management Consulting Group PLC Update on the Kurt Salmon escrow funds (7038W)

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RNS Number : 7038W

Management Consulting Group PLC

03 August 2018

This announcement contains inside information for the purposes of article 7 of Regulation 596/2014 (the "Market Abuse Regulation").

3 August 2018

Management Consulting Group PLC

Update on the Kurt Salmon escrow funds

In summary, a further total of approximately GBP242,000 has been released from escrow to the Group and the Company and Wavestone have agreed to extend the escrow period for the remaining GBP1.65m under discussion until 7 October as negotiations continue.

As announced on 10 July 2018, the Group and Wavestone agreed to extend the period of escrow for approximately EUR1.8 million (approximately GBP1.6 million) of the second tranche of EUR4 million held under escrow which guarantee certain contingent liabilities relating to the disposal of parts of the Kurt Salmon business to Wavestone in 2016 (the "KS Escrow Funds") by a further month to 7 August 2018. This was in order to allow negotiations over the treatment of the potential indemnification claims raised in Wavestone's further letter of claim of 26 June 2018 to be finalised.

The Group continues to assess the merits of these further claims and to discuss the appropriate treatment with Wavestone. As these discussions are still continuing, the Company and Wavestone have agreed to extend the period of escrow for an amount equal to the approximate EUR1.65 million (approximately GBP1.5 million) claimed by Wavestone by a further 2 months to 7 October 2018 so as to allow the negotiations to continue. As a result, a further approximate EUR145,000 (approximately GBP130,000) will be released to the Group from the escrow arrangements reflecting the agreement between Wavestone and the Group that one of the further potential indemnification claims raised by Wavestone is no longer an issue.

In addition, on 27 July 2018, approximately EUR124,000 (approximately GBP112,000) was released to the Group from the EUR2 million (approximately GBP1.8 million) of escrow established on 27 April 2018 in relation to the first tranche of the KS Escrow Funds reflecting the settlement of one of the potential claims covered by this escrow without any liability to the Group.

The Board remains confident as to the Group's overall position in terms of the claims raised to date by Wavestone, and so expects to secure the release of the remaining outstanding KS Escrow Funds progressively. As previously announced, the Board believes a degree of uncertainty still exists as to the timing of the remaining KS Escrow Funds being released to the Group in the second half of 2018.

The Board will provide further updates on these matters as appropriate.

Management Consulting Group PLC

Tel: [phone]

Nick Stagg, Chairman and Chief Executive

Market Abuse Regulation

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.

The person responsible for arranging for the release of this announcement on behalf of the Group is Nick Stagg, Chairman and Chief Executive.

Forward-looking statements

Certain information contained in this announcement constitutes forward looking information. This information relates to future events or occurrences or the Company's future performance. All information other than information of historical fact is forward looking information. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this announcement should not be relied upon. Forward-looking information speaks only as of the date of this announcement.

The forward looking information included in this announcement is expressly qualified by this cautionary statement and is made as of the date of this announcement. The Group does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.

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August 03, 2018 02:00 ET (06:00 GMT)