(Correcting that KPI recently acquired an additional stake in Kingswood from Astoria Investments)
(Alliance News) - Kingswood Holdings Ltd said Tuesday it has agreed a GBP3.2 million drawdown from an existing convertible loan facility with KPI Nominees Ltd, which is run by Kingswood's chief executive and its non-executive deputy chair.
KPI is owned by Kingswood Property Finance Ltd Partnership, a private investment partnership owned by Gary Wilder, chief executive of Kingswood, and Jonathan Massing, non-executive deputy chair of Kingswood.
In July, Astoria Investments UK Ltd agreed to sell its 18% stake in Kingswood to KPI. Prior to this transaction, KPI held an 39% stake in Kingswood.
Kingswood said the drawdown will provide the company with the additional funds to enable it to satisfy upcoming investment obligations and for general working capital purposes.
The wealth manager also confirmed its 2019 trading remains in line with management expectations. Kingswood said its restructuring is now "largely complete" and believes it is now "positioned for a strong second half".
In 2018, Kingswood's pretax loss narrowed to GBP3.8 million from GBP6.1million in 2017. Revenue decreased 5.4% to GBP8.8 million. Assets under management & advice in its core business at the end of 2018 stood at about GBP800 million, behind the roughly GBP900 million reported at the end of 2017.
In June, Kingswood said it had agreed a potential funding arrangement, to pursue a number of opportunities.
At the time, Kingswood said it has agreed non-binding heads of terms with a provider of "substantial" permanent growth capital for a potential equity investment in the form of convertible preference shares. The company is now undertaking "extensive" due diligence.
On Tuesday, Kingswood said the "potential provider of substantial permanent growth capital" has concluded its due diligence on the company and is now is advanced negotiations with Kingswood over investing in the company.
"The investment would be subject to applicable regulatory and shareholder approvals and, if finalised and approved, allow the company to pursue its pipeline of potential acquisition opportunities. The company expects to provide a further update in the near future," Kingswood added.
Shares in Kingswood Holdings were 3.8% higher in London on Wednesday at 8.30 pence each.
Kingswood H. (KWG)