(Alliance News) - Manx Financial Group PLC on Monday said subsidiary Conister Bank Ltd intends to acquire further shares in Beer Swaps Ltd to increase its shareholding to 75%.
Conister Bank initially bought 20% holding in Beer Swaps in 2018 and secured an option to buy the remaining stock by April 2021.
Beer Swaps provides equipment finance and rental products to UK-based breweries.
On Monday, Manx said Conister bank will be paying GBP500,000 for a 55% stake buy. This transaction has been approved by the Isle of Man Financial Services Authority.
Manx said it believes that this purchase further strengthens Conister Bank's strategy of developing a network of niche loan brokers within the UK.
The company also noted that Beer Swaps has developed an "impressive" customer base within the brewing industry, with a considerable potential for further expansion by offering flexible hire and equipment purchase terms.
For the year to the end of March 2019, Beer Swaps reported turnover of GBP400,000 and a pretax profit of GBP100,000.
In addition, Manx said it was considering "the most suitable method" of securing capital for Conister Bank, both to maintain and continue growth, and to take advantage of further acquisition and lending opportunities.
As a result, Manx said it has decided to accept a GBP1.0 million loan for five years, with a coupon of 5.4% and no conversion rights, from Burnbrae Ltd, a party connected with directors Jim Mellon and Denham Eke.
Also, the company said it has negotiated a further renewal of the GBP1.3 million convertible loan note from Mellon, for five years, at a reduced interest rate of 5.4%, down from the previous 6.5%.
Manx said it has approved the extension for a further two months to April 26 of a convertible loan note of GBP460,000 at an interest rate of 6.5%, held by Southern Rock Insurance Co Ltd, which was due for repayment on Wednesday last week.
The AIM stock was trading 8.0% higher in London on Monday at 9.99 pence a share.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Manx Financial (MFX)