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Imperial Brands delays cigars business sale by a month

The tobacco company agreed the €1.2bn (£1.1bn) sale in April to cut debt

Imperial Brands - Imperial Brands delays cigars business sale by a month

Imperial Brands PLC (LON:IMB) announced the sale of its cigars business has been delayed by a month and will be completed on October 29 due to COVID-19.

The tobacco company agreed the €1.2bn (£1.1bn) sale in two parts of its handrolled cigar business in April to cut debt.

READ: BAT and Imperial Brands should fire up share buy backs, says broker

Purchasers Gemstone Investment and Allied Cigar Corporation made a non-refundable down payment of €91.7mln and agreed to pay another non-refundable payment of €85mln to Imperial by October 7.

Imperial also agreed to provide a six-month vendor loan at completion of up to €250mln while the purchasers finalise long-term financing arrangements.

The Premium Cigar unit, which is made up of US-based Tabacalera and four 50%-owned joint ventures with the government of Cuba to export hand-rolled Cuban cigars, contributed £226mln of net revenue and £80mln of profit before tax in the last full year.

Shares rose 1% to 1,404.9p on Monday in early trading.

--Adds shares--

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