LONDON (Alliance News) - GLI Finance Ltd on Monday set out in detail its proposed strategic relationship with Golf Investments Ltd, a member of the Jersey-based Somerston group of companies, which currently owns a 9.0% stake in the alternative finance provider.
The plan was revealed in December, and now GLI is seeking shareholder approval at a meeting scheduled for 1000 GMT on February 25.
GLI is looking to issue warrants to Golf, which would give it the right to subscribe for up to 32.0 million new shares in the company that could raise up to GBP15.1 million once the warrants become exercisable.
Should that be approved by shareholders, Golf would acquire 15.0 million shares in investment trust GLI Alternative Finance PLC from GLI Finance Ltd at the lower of GBP1.0 or GLI Alternative Finance's prevailing net asset value.
Also, Golf would acquire a 50% stake in GLI Asset Management Ltd, currently owned by GLI Finance in full, through the purchase of 125,000 shares for GBP250,000. GLI Asset Management manages GLI Alternative Finance.
This follows a GBP5.6 million equity fundraising with Golf in December, through the issue of 15.0 million new shares which began trading on AIM in the same month. The total proceeds will be used to repay GLI Finance's existing debt to Jersey-based Sancus Ltd and fund general corporate activity.
The outstanding balance on the Sancus loan facility stands at GBP29.9 million.
"It is the intention following completion of the GLIAM share acquisition that the company will work as a strategic partner with Golf Investments to expand GLIAF and to develop other income related products which in turn may support the growth of the platforms owned by the company," GLI Finance said.
"The board believes that the terms it has agreed with Golf Investments will reduce the company?s overall cost of capital by both helping to accelerate the growth of GLIAM and GLIAF whilst substantially repaying the loan facility," GLI Finance said.
As part of the deal, Golf has a conditional commitment to subscribe or procure subscriptions for up to 10.0 million C shares in GLI Alternative Finance.
Shares in GLI Finance were up 2.8% at 29.05 pence on Tuesday afternoon.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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