LONDON (Alliance News) - CEPS PLC Wednesday said it has increased its shareholding in CEM Press Ltd to 71.5% from 21.4%.
The acquisition has been effected by the introduction of a new holding company, CEMTEAL Ltd, which has acquired 98% of CEMP and of which CEPS is a 73% shareholder. The remaining 27% of CEMTEAL not owned by CEPS is owned by CEMP's management team.
CEPS said it has advanced GBP300,000 to CEMTEAL to fund the acquisition in the form of unsecured non-convertible loan notes carrying an interest rate of 7%.
In addition, CEPS has agreed to act as guarantor in respect of loan notes totalling GBP963,350 issued by CEMTEAL alongside the CEPS loan notes to certain of the vendors. The CEMTEAL loan notes carry an interest rate of 4% and are repayable in tranches between September 2016 and September 2018.
CEMP is a manufacturer of fabric and wallpaper pattern books, swatches and shade cards, with a focus on the high-end fabric and wallpaper market, and its products are sold both in the UK and overseas. In 2014, CEMP's sales were GBP3.4 million and pretax profit was GBP54,280. Trading performance of CEMP so far in 2015 has been in line with management's expectations, CEPS said.
"The directors of CEPS believe that the acquisition will be a valuable addition to CEPS and fits well with CEPS' strategy of acquiring interests in established, cash generative businesses, utilising a funding structure aimed at maximising the return on equity invested," CEPS said in a statement.
Shares in CEPS were trading up 1.7% at 55.40 pence on Wednesday afternoon.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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Ceps (CEPS)