British tobacco group Imperial Brands plans to sell its global premium cigar business as a part of a divestment plan to cut debt and reinvest the money to further growth.
The maker of Davidoff, Parker & Simpson and Gauloises Blondes cigarettes said in May last year that it would sell businesses and roll out new vaping products in a drive to improve performance in a declining tobacco market.
The company, which also makes Kool and Winston cigarettes, has said it expects its divestment programme to generate proceeds of up to £2 billion ($2.61 billion).
Sales And Divestitures
Imperial said on Tuesday it has generated £280 million so far through sales and divestitures.
Imperial reported net debt of £11.89 billion for the year ended 30 September.
"Premium Cigars has performed well over a number of years ... however, it is a unique luxury business with a different consumer base and route to market relative to Imperial's other businesses," the company said.
Premium Cigars, which boasts of an annual volume of 340 million cigars, with 4,500 employees and factories in Dominican Republic, Honduras and the United States.
Imperial also said 'significant progress' had been made with a number of other divestment opportunities.
"Recognising that tobacco valuations have come under some pressure in the last 12 months, assets will be sold only if they will realise appropriate value," it added.
Imperial is being advised by AZ Capital on the sale of Premium Cigars.