3 May 2011 09:57
City of London Group plc ("City of London Group" or "the Company")
Following the completion of its Placing and Open Offer, City of London Group plc ("COLG") is pleased to announce that its agreement to invest in Credit Asset Management Limited ("CAML") has become unconditional and that, accordingly, the CAML joint venture will become effective immediately.
CAML is targeting short and long term professional practice lending and asset backed lending to the SME sector. It is led by Michael Hughes and James Frost who were responsible for developing Universal Leasing Limited, a successful SME and professional services leasing business. Chris Boobyer, its Chairman, has over 30 years experience in financial services, including senior positions with Barclays Asset Finance.
COLG will own 51% of CAML and will be funding CAML's running costs through a three year working capital loan of £750,000 at an interest rate of 4.67 per cent per annum. It will invest up to the maximum permitted under its investment policy in seed equity for CAML, alongside which CAML expects to agree bank borrowings to support the growth in its book. The intention is to attract further equity from external sources in the future. CAML will also be seeking equity management mandates targeting the same sector from which it will aim to earn management and performance fees.
COLG is also pleased to announce that it has entered into an agreement through which its subsidiary, City of London Law Funding Limited ("COLLF"), will lend up to £500,000 to Novitas Futures Limited ("Novitas Futures"). Novitas Futures is a 50% owned start up joint venture with Jason Reeve, the owner of Novitas Investments Limited, an independent financial adviser targeting the High Net Worth ("HNW") sector and it will concentrate on offering secured loans to HNW clients who are undertaking litigation. Novitas Futures has been developed in conjunction with the principals of Therium Capital Management Limited ("Therium"), COLG's litigation funding business, who will also source new business for the venture. Following the transaction COLG's effective shareholding in COLLF will be 68%.
Eric Anstee, CEO of COLG, commented:
"I am delighted that we have been able to attract such an experienced team, with an enviable track record, to CAML. Combined with our trade finance business, this provides us with a strong delivery capability for lending into the SME market as an alternative to the major banking groups. The further advance into the litigation and law funding sector through Novitas Futures means that we are able to announce today two developments which will provide significant steps forward for our overall business model and Specialist Finance Strategy"
3rd May 2011
For further information please contact:
City of London Group Plc Eric Anstee, Chief Executive Officer John Kent, Executive Director | Tel: +44 (0) 20 7628 5518 |
Singer Capital Markets Limited Jeff Keating Jonathan Marren
| Tel: +44 (0)20 3205 7500 |
College Hill (Financial PR and Communications) Roddy Watt Tony Friend | Tel: +44 (0)20 7457 2020 |