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Encore Capital to incur charges related to sale of assets to Credit Corp Group

Encore Capital Group Inc. said it expects to incur various charges in connection with the sale of its subsidiary, Encore Australia Holdings I PTY LTD, and other associated entities, collectively known as Baycorp, to Credit Corp Group Ltd.

The debt collection company expects to record a noncash goodwill impairment charge of about $10.8 million, as the fair value of the assets was below the current recorded book value. It will also incur a loss on sale of approximately $12.6 million and roughly $1.5 million in costs, such as legal fees and consulting fees.

Encore Capital expects the total amount of charges to be about $19.7 million on an after-tax basis.

Credit Corp Group said the acquisition will boost its fiscal-year 2020 profit, increasing its forecast to a range of A$81 million to A$83 million from A$75 million to A$77 million.