QUINDELL, the Aim-listed insurance firm whose stock price was ravaged by a short-seller attack earlier this year, saw its shares rally nearly six per cent yesterday after it announced it was buying out the RAC’s stake in its Connected Car Solutions (CCS) joint venture.
Quindell said it would take full control of CCS, which makes “black boxes” for cars to monitor drivers and reduce insurance premiums, in a restructure costing £18.5m. This would be offset by a £15m cash payment by the RAC.
The two firms started working together on the joint venture in April with £15m investment and the expectation of a further £70m in due course.
“The relationship between RAC and Quindell remains strong and we will continue to work closely together in key areas… Quindell has a number of exciting new contracts in the telematics and connected car space and is confident of achieving its targets in this area,” said Quindell chairman Rob Terry.
The restructure is not expected to have a negative effect on Quindell’s profits and the insurance outsourcing firm reaffirmed its subscriber targets and market guidance. It also expects to save on costs it will no longer spend on the rollout of the RAC black boxes. Its shares closed up at 179p.