(Alliance News) - Stanley Gibbons Group PLC on Friday said it has acquired a 780-item trading inventory from major 58% shareholder Phoenix SG Ltd for GBP1.1 million in cash.
In addition, collectible postage stamp retailer Stanley Gibbons has a loan facility with Phoenix SG which is payable March 2023. Of this, GBP14.1 million had been drawn on Wednesday this week.
Stanley Gibbons and all of its subsidiaries - which are guarantors to the loan agreement - have signed a deed of release as well as confirmation with Phoenix SG which releases Stanley Gibbons (Guernsey) Ltd, currently in liquidation, of its obligations and liabilities under the loan.
Consequently, Stanley Gibbons (Guernsey) Ltd is no longer guarantor of the loan agreement and Stanley Gibbons as a group is no longer in default on its loan. At times of default, the loan becomes repayable on demand.
The initial GBP1.1 million consideration for the inventory consists of the net proceeds on completed sales - deducting a commission payment to Stanley Gibbons - on sales of the inventory to third party buyers.
The amount is payable over the ten year term of the agreement, although if 20% or more of the GBP1.1 million remains unpaid after seven years them the two firms have agreed to "negotiate in good faith the repayment of the outstanding consideration".
Provided all of the inventory has been sold and "appropriate payments" made by the ten year mark, no further consideration is due and all relevant inventory will be returned to Phoenix SG.
Stanley Gibbons will also need to obtain Phoenix SG's approval to sell any inventory item at less than its base cost. The deal is between Phoenix Sg and Stanley Gibbons subsidiary Stanley Gibbons Ltd.
"As a result of this agreement, [Stanley Gibbons Ltd] will have both the opportunity to earn commission from subsequent sales and also to further improve the range of items it is able to offer, which will be available for sale from its website and specialist dealers,2 said Stanley Gibbons.
Shares in Stanley Gibbons were flat at 3.05 pence in London on Friday afternoon.
By Anna Farley; annafarley@alliancenews.com
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