News blog

Hertford International Group

  • BY: Andrew Hore |
  • POSTED: 19/03/2010 |

Pre-paid debit cards marketer Hertford International Group has revealed the disposal of a majority stake in a small subsidiary but there is no news about Cheque Exchange even though the most recent Provident Financial figures say that Provident regained control of the business on 1 November 2009.

This stake disposal suggests that Hertford is trying to conserve its cash and keep its costs as low as possible. Yet, it is nowhere near as important as what is happening with the core business and Cheque Exchange, which was acquired to help grow the debit card business.

Hertford shares were suspended on 5 November 2009 at 4p each, which valued the company at £1.94m. This was followed five weeks later by the resignation of chief executive Lewis Findlay and finance director Adam Dougall.

Even though the shares are suspended it seems strange that Hertford has not made its shareholders aware of the exact position of Cheque Exchange.

There was an ongoing deferred consideration dispute between Hertford and Provident Financial over Hertford’s purchase of Cheque Exchange, which has been the UK super agency for MoneyGram since 2000.

Hertford was supposed to be paying a total of £3m for Cheque Exchange, with £1.9m deferred, according to Provident Financial. A payment of £1.4m was due in July 2009. The other £500,000 should be paid in two instalments of £250,000 in January 2010 and January 2011.

To quote the Provident Financial full year results announcement on 2 March 2010: “Following non-payment of the first instalment of the deferred consideration, the group exercised its charge over the ordinary shares and regained control of Cheque Exchange Limited on 1 November 2009”.

This seems to contrast with Hertford’s statement on 12 November 2009: “During the course of the last seven days, the parties have had constructive correspondence on this matter but a definitive resolution of this matter has not yet been reached”. This does not preclude Provident Financial taking the business back but it appears to leave out a lot of information. It may be possible that even though the effective date when control was regained was 1 November it could have been decided after that date. Even so, if Provident Financial announced this on 2 March there is no reason why Hertford could not have admitted to this by then.

Hertford is the kind of Aim company that was keen to push its business initially but it doesn’t seem to want to clarify the position concerning the dispute with Provident Financial.

Surrey-registered Hertford is selling 55% of CrewCall Network, which was rolling out its Talk2World low-cost international telephone calls service in the fourth quarter of 2009. The sale price is undisclosed but unlikely to be very much.

CrewCall Telecoms, which was incorporated on 19 June 2009 and whose registered address is in Berkshire, is buying the 55% stake and says it will look at ways of marketing the product.

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