UPDATE: Quindell share price recovers after it sells stake in Nationwide Accident Repair Services and announces share issue
Shares in insurance outsourcing firm Quindell started the day six per cent lower at 88p, but then bounced back to 91p by mid afternoon after it said it had sold its minority stake in Nationwide Accident Repair Services.
It said it sold its stake in the British building society’s vehicle repair service on 4 March for 65 pence per share. The sale netted around £7.1m, which the insurance outsourcer will use for "general working capital purposes."
Quindell previously denied social media speculation it was looking to sell its stake in the repair group in November, saying "it is not actively seeking to sell its shares in Nationwide Accident Repair Services".
The embattled insurance outsourcer added it will also issue more shares "in order to facilitate future options for disposal".
Quindell said in a statement to the London Stock Exchange:
As part of its wider strategy in respect of non-core assets, the company is taking steps to consolidate some of its property services interests in order to facilitate future options for disposal.
Therefore, application will be made for 3,666,667 new ordinary shares of 15p each in Quindell, to be admitted on Aim.
But Quindell gave no mention of Slater & Gordon, with which talks over selling its legal services division have been rolling on since 22 January. Last month, it said the talks had been extended, quelling speculation they had hit a wall.
The company's share price has plummeted since the publication of a report by shadowy short-sheller Gotham City, which accused the company of having "magical… paper profits". It's subsequently been beset by problems.
By the end of 2014, chairman and founder Rob Terry had resigned, as had its broker, Canaccord Genuity, while investor Fidelity halved its stake.
— UPDATE: This article has been updated to reflect the recovery in share price by the afternoon.