Currys offloads Kotsovolos to shift focus back to UK, Ireland and Nordics

Consumer electronics retailer Currys is selling its entire Greek and Cypriot division for €200 million (£175m) in a move which it says will simplify its business model and pay down its pension deficit.

The sale of Dixons South East Europe, trading as Kotsovolos, to Public Power Corporation, is still subject to approval by Currys' shareholders.

However, Currys said the deal "has strong strategic rationale and represents an attractive outcome", allowing the company to focus on its larger markets of the UK and Ireland, and Nordics regions.

The €200m value, adjusted to include lease liabilities of €97 million, implies a valuation of Kotsovolos of six times adjusted EBTIDA.

"The multiple represents a material premium to the valuation at which Currys' shares trade today, or have done over the last 12 months and consequently, the board believes that significantly greater value can be realised for shareholders from the disposal, when compared to retaining Kotsovolos within the group," the company said.

Currys will use the proceeds to reduce net debt and, a later date, potentially reduce the pension fund's deficit and required future contributions. The company will also explore the potential to return any surplus capital to shareholders, it added.

Commenting on the sale, chief executive Alex Baldock said: "This proposed sale of Kotsovolos is an excellent outcome for Currys and for our shareholders. It recognises Kotsovolos's value and accelerates its realisation. As a group, we're focused on maintaining our encouraging momentum in the UK&I and getting the Nordics back on track; this disposal will further strengthen the foundations on which we do both."