Dixons has entered into an agreement to sell its loss-making ElectroWorld operations to NAY a.s., an electricals specialist in Central Europe.

The retailer, which last week unveiled plans to merge with Carphone Warehouse, is in talks to sell the business to NAY a.s., an electricals specialist in the region.

Electroworld operates 26 specialist electrical retail stores across Czech Republic and Slovakia. In the year to April 2014, it generated losses before tax of £5.6m on turnover of £129m.

Dixons is to receive a “small deferred cash consideration” spread over three years. Completion of the deal is expected to take place during the summer.

Dixons chief executive Sebastian James said: “I am very pleased that we have been able to secure a strong future for Electroworld who will be able to flourish as a part of the NAY Group in Central Europe. Following this transaction Dixons will be a market leader in every market in which it operates, delivering on one of our key strategic objectives.”

NAY co-founders Peter Zálešák and Ján Tomášsaid:  “We are pleased to announce the closure of this deal with ElectroWorld. It is a big step towards achieving our goal of reaching EUR 300m of sales in Central Europe and we strongly believe it allows the development of our market leading position in Slovakia. Furthermore it achieves our longer-term development to enter the Czech market and we are delighted to do that in conjunction with such a good partner as Electroworld.”