Quindell denies stake sale

Struggling insurance outsourcer Quindell is not selling its stake in Nationwide Accident Repair Services (NARS). It said so in a brief statement on Thursday as speculation mounts that the company will have to raise cash.

"Quindell…confirms that, contrary to speculation, it is not actively seeking to sell its shares in Nationwide Accident Repair Services plc," read the release, issued in response to talk that Nationwide's broker Westhouse Securities was hawking the shares at a big discount to the market price.

It bought a 25.3% stake in the accident repair services firm in September 2013 in exchange for Quindell shares. Those 10.93 million NARS shares, bought from 3G Capital Management, Miton Group and Octopus Investments, are now worth just under £7.8 million.

And Quindell could certainly do with the money. Its revenue model, which recognises the revenue in its accounts way before it receives payment for the job, has come in for heavy criticism. It means the company could need more cash to tide it over until that money comes in.

This is unlikely to be the last denial from Quindell.

Other rumours doing the rounds include a possible suspension of the shares, and possible investigations by the Financial Conduct Authority and London Stock Exchange. Certainly the latter is probably already underway given a possible breach of rule 11 of the AIM code, which reads:

An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities.

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