LONDON (Alliance News) - Paternoster Resources PLC Tuesday said it has sold part of its stake held in fellow AIM-listed Plutus PowerGen PLC and made a substantial profit, but said it still retains a considerable stake in Plutus as it believes it is has an "interesting and exciting business model".
Paternoster has sold 25.0 million Plutus PowerGen shares for 1.10 pence each, bringing the total consideration to GBP275,000.
Plutus shares were trading down 12% on Tuesday morning at 1.10 pence per share.
Paternoster said the 1.10 pence sale price is more than four times the price of its original investment in Plutus and said the GBP275,000 in proceeds exceeded the cost of Paternoster's entire investment in Plutus.
"We continue to believe that Plutus has an interesting and exciting business model. However, notwithstanding this, it is only prudent for an investment company such as Paternoster to realise an element of the substantial gain that it has made from this investment," said Paternoster Chairman Nicholas Lee.
Following the transaction, Paternoster still holds 69.3 million shares in Plutus, representing a 12.1% stake in the company. Of that total holding, 20.0 million shares are subject to an option in favour of certain members of the Plutus management team at a price of 0.6 pence per share, said Paternoster.
"[Paternoster have] retained a good-sized shareholding in the company in order to benefit from its envisaged future development. It is also important to demonstrate to our investors, that the company can realise the profit created within its investment portfolio which this transaction clearly does," added Paternoster.
Paternoster shares were trading down 3.7% to 0.207 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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