LONDON (Alliance News) - Paragon Diamonds Ltd saw its shares rise Tuesday morning after it said it will buy 63 million of its own shares, an 18.9% stake, from Lanstead Capital LP and cancel them, and also settle all the outstanding equity swaps it has with Lanstead.
Paragon Diamonds said it has agreed to buy the shares from Lanstead for 3 pence each in an off-market purchase, while the equity swap settlement is expected to be about GBP553,000
and will be offset against the purchase price for those shares.
It is taking a GBP1.3 million loan from Titanium Capital Investments Ltd, a private equity investment
company managed by Paragon's Chairman Philip Falzon Sant Manduca, to fund the share purchase and equity swap settlement. The loan is repayable on demand, but carries no interest and is convertible into Paragon shares at 3 pence each.
Lanstead will have no further interest in Paragon shares once the deals go through.
"The acquisition of Lanstead's interest highlights management's commitment to building a vertically
integrated diamond company, while ensuring the issued share capital is kept to a minimum so that shareholders capture as much of the value generated via positive share price performance," Sant Manduca said in a statement.
"The company is now well placed to attract long term investment from strategic shareholders who will support management's ambition to build Paragon into one of the most cost-efficient and successful large diamond production and distribution businesses," he added.
Paragon Diamonds shares were up 3.9% at 4.00 pence Tuesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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