(Alliance News) - Adamas Finance Asia Ltd on Monday said it has conditionally agreed to acquire 40% of Infinity Capital Group Ltd subsidiary Infinity TNP for GBP5.6 million in an all-paper deal.
The pan-Asian investor will issue 16.2 million shares as consideration at a price of 34.8 pence per share, a 20% premium to its 30-day weighted average price per share.
Once the deal is complete, Infinity Capital will hold a 16% stake in Adamas Finance Asia, with both Adamas and Infinity Capital having the right to appoint a single non-executive director to the other firm's board.
Infinity Capital is a real estate developer and will transfer "seven property units in a luxury hotel condominium being built by [Infinity Capital], Tellus Niseko". These are located within Japan's Niseko ski resort.
The deal is conditional, requiring an independent valuation report valuing the property units at at least USD20.0 million and the execution of a shareholder agreement between Infinity Capital and Adamas Finance Asia.
"This transaction further enhances the company's capacity to generate regular cash income from an attractive investment in its portfolio and, when coupled with the issuance of shares in the company at a significant premium to the current share price, it helps to support the underlying valuation of the company and its growth strategy," said Adamas Finance Asia Chair John Croft.
"This Transaction is in line with [Adamas Finance Asia's] investment policy and helps to ensure the company commences dividend payments to shareholders in due course, whilst also providing investors with the potential for capital and income growth from the company's asset portfolio," he added.
Shares in Adamas Finance Asia closed untraded at 24.00 pence in London on Monday.
By Anna Farley; annafarley@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.