Cornerstone FS to Sell Its Non-Trading Subsidiary Capital Currencies for £150K

Cornerstone FS plc, the cloud-based provider of international payment, currency risk management and electronic account services to SMEs, has announced the signing of a share purchase agreement to sell its non-trading subsidiary, Capital Currencies Ltd.

As per the agreement, the sale of Capital Currencies will be completed for a sum of £150,000, which will be paid in cash upon completion. The deal is subject to regulatory approval.

Capital Currencies is an authorized payment institution (API) regulated by the U.K.'s Financial Conduct Authority (FCA), focusing on providing high-level currency exchange and international payments services directly to larger UK-based SMEs. In January 2022, Cornerstone FS acquired the company for £3 million​ to accelerate its business growth and expand the presence in its core market

Following the acquisition, all the clients of Capital Currencies were subsequently transferred to the Cornerstone technology platform, and its employees became part of the Group. As a result, Capital Currencies ceased to operate as a trading entity from November 2022 onwards.

Cornerstone Payment Solutions Ltd, the primary operating subsidiary of Cornerstone FS, is an FCA-regulated authorised electronic money institution, which grants the Group broader regulatory permissions compared to the comparatively restricted API license held by Capital Currencies.

Cornerstone FS believes that the sale of this non-core asset to a non-competitor is in the best interests of the company. "The proceeds from the sale of Capital Currencies will be used to strengthen the Company's existing cash resources," stated the Group.

James Hickman, CEO of Cornerstone FS, commented: "This is a great outcome for Cornerstone, generating value from the sale of a licence, that is surplus to our requirements, to a non-competing business. As with the sale of our Avila House subsidiary at the start of the year, which was acquired for its small e-money licence, this transaction also demonstrates the importance of payments and e-money registrations and the value that purchasers place on them."

He added: "As we noted in our recent interim results, we had an excellent first six months of the year with that momentum continuing into H2, and this additional £150k, when received, will further strengthen our cash position."

In July this year, Cornerstone FS released its unaudited trading update for the first half of the year ended June 30, 2023​, reporting a total revenue of approximately £3.6 million, a significant increase of 89% on a year-on-year basis.