19th Mar 2014 12:24
LONDON (Alliance News) - City of London Group PLC Wednesday said it has reached a financing deal to support the growth of its trade finance platform, Trade Finance Partners Ltd (TPFL).
The deal, signed with existing funding partner Macquarie Bank Ltd, increases Trade Finance Partners' facility with the bank to GBP23.0 million from GBP18.0 million, with an agreement in principle for a further GBP25.0 million.
The facility has been extended for two years to 2017. The deal also sees a GBP5.0 million injection of new subordinated debt capital into TFPL to fund growth.
Macquarie will provide GBP3.0 million of that amount and has also exercised its option over 20% of the equity of TFPL, acquired equity from a departing director and subscribed for new equity, giving it a 33% stake in the business on a diluted basis.
City of London Group's economic interest in TFPL's shares will fall to 43.0% from 44.0%, with the remaining 24% of the diluted equity held or under option to TFPL management.
"I am pleased to announce these additional funds for our trade finance platform. This agreement will increase the size of TFPL's balance sheet enabling the continued, substantial expansion of the business, and we look forward to continuing to work closely with Macquarie and TFPL management to support the growth," John Kent, acting chief executive, said in a statement.
City of London Group will welcome the financing agreement after a difficult few months, during which a GBP17.4 million fundraising collapsed.
In February, Kent told Alliance News the written-off costs related to the failed fundraising will amount to between GBP400,000 and GBP500,000.
That failed fundraising plan, which was meant to raise GBP17.4 million from Paul Iliescu - a high-net-worth German citizen - and Bruce Mee - who had been set for the CEO job under the share placement deal - fell through after the new investors failed to transfer the security payment to City of London Group despite receiving an extension to the original deadline.
City of London Group shares were Wednesday quoted at 27.50 pence, up 4.8%.
By Samuel Agini; [email protected]; @samuelagini
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