Insurance group sells off part of its international operation
Leeds-headquartered CPP Group says it has disposed of its operations in Mexico, two days after confirming it intends to pull out of its legacy UK and European Card Protection business.
The group has sold its wholly-owned subsidiaries, Servicios de Asistencia a Tarjehabientes CPP Mexico S de RL de CV and Profesionales en Proteccion Individual S de RL de CV – collectively “CPP Mexico” – to Rafael Ortiz Moran and Silvia Daniela Rodriguez Gaona for a nominal cash consideration of $1 (Mexican Peso).
As part of the disposal CPP Group, which provides assistance and insurance products, has left cash balances of around £280,000 in CPP Mexico to cover initial working capital requirements and other committed liabilities.
Rafael Ortiz Moran is the country manager of CPP Mexico.
Simon Pyper, CEO of CPP Group, said: “The disposal of our Mexican business is consistent with the Group’s recently announced strategy to withdraw from its legacy businesses and migrate CPP to an InsurTech business, one with a clear purpose and simplified operating model.”
CPP Mexico was established to capitalise on the assumed demand for the Group’s legacy protection and assistance services in that market.
However, after a period of limited new business development and operating losses, CPP Mexico was placed into run-off in early 2021.
The natural decline in the book will again see the business become unprofitable during 2023 and beyond.
CPP explains: “In line with the Group’s strategy announced on 19 October 2022 to withdraw from its Legacy Businesses, the Board believed an exit from the Mexican market was in the best interests of CPP Group.
“The Board concluded a sale of the business to the buyers, rather than a closure, was the least costly option and the best outcome for the Group.”
For the 2021 financial year, CPP Mexico contributed EBITDA of £0.1m to the group’s overall EBITDA from continuing operations of £7.5m and recorded a loss before tax of £0.3m.
CPP notes the impact of the disposal will not be material to the Group. As of 31 December 2021, CPP Mexico had net liabilities of £2.6m.
