7 Jun 2012 12:23
7 June 2012
City of London Group plc
TRADE FINANCE PARTNERS AGREES THREE YEAR £15 MILLION TRADE FINANCE FACILITY FROM MACQUARIE BANK
City of London Group ("COLG" or "the Company") is pleased to announce that its subsidiary Trade Finance Partners Limited ("TFPL") has agreed a three year trade finance facility with Macquarie Bank Limited ("Macquarie"). The initial amount will be £15m with the option to increase by mutual agreement up to £25m within the period.
Under the arrangements, Macquarie will also invest £263,150 in new equity in TFPL which will represent a 5% shareholding. It will also invest £763,850 in unsecured convertible loan notes in TFPL, where the capital and accrued interest are convertible after three years. If converted in full, this would increase Macquarie's shareholding in TFPL, on a fully diluted basis, to 20%. If not converted the convertible loan notes and interest become repayable in 2017.
TFPL started trading in January 2011 and achieved break even by 30 September 2011. The facility provides TFPL with a secure medium term foundation on which it can continue to build its business.
Chris Ash, CEO of TFPL, commented:
"We are delighted to be entering into this financing partnership with a bank of Macquarie's quality and expertise. We believe this will provide us with the springboard to take our business to a new level and we look forward to a mutually rewarding future."
Nikolaus Woloszczuk, Executive Director Macquarie Corporate and Asset Finance said: "Macquarie has been active in European financing markets since early 2009, creating bespoke financing solutions by understanding the fundamentals of the businesses we work with. We believe TFP's management team has the experience and capability to provide innovative trade finance solutions to an important but underserved segment of the UK market. We look forward to working with them."
Eric Anstee, CEO of COLG, commented:
"This demonstrates the value that has been created within TFPL and the promise of growth to come, further validating the COLG business model. We welcome Macquarie's long term involvement."
For Further information;
City of London Group | Tel: +44 (0) 20 7628 5518 |
Eric Anstee CEO | Tel: +44 (0) 783666 6339 |
John Kent Deputy CEO | Tel: +44 (0) 776803 0102 |
Macquarie | Tel: +44 (0) 20 3037 2420 |
Karen Smith Division Director | Karen.Smith@macquarie.com |
College Hill | Tel: +44 (0) 20 7457 2020 |
Tony Friend | |
Antonia Coad |
Notes to Editors
Trade Finance Partners
TFPL was established in 2010 and formed a joint venture with COLG at the end of that year. TFPL target clients are typically medium sized businesses with revenues of up to £100m and which are unable to secure finance from traditional sources. TFPL does not lend money as banks do; instead it funds individual transactions through a trading model and looks through the client to the credit strength of the end buyer. TFPL's "traditional merchant banking" trading model provides for the purchase of goods on behalf of its client with the taking of an assignment of the ensuing receivable upon resale. Either TFPL's clients or the clients' customers are credit insured through an A- rated credit insurance company. TFPL provides a complete end to end solution for its clients' purchase orders.
To see a short video of Chris Ash, CEO of TFPL, explaining the company's business please click on the attached link: www.tradefinpartners.com/about-us
City of London Group
COLG is an investment company, with a wide range of national and international investments. A public company since 1986, COLG has had a full London Stock Exchange listing since August 1996 (LSE symbol CIN).
The Company's strategy is to build a quality Financial Services Group centred on Specialist Financing and Alternative Fund Management. The Company believes there are particular opportunities in the SME and professional services sectors as major national and foreign banks limit new lending to these borrowers. It therefore seeks to identify and exploit product niches and business models in these sectors where they are supported by strong day to day management teams, providing initial equity, working capital and seed funding for those teams.
Since the final quarter of 2009, COLG has developed four specialist financing funds, pledging significant seed funds to Therium Capital Management Limited, a third party Litigation Funder, Credit Asset Management Limited and Professions Funding Limited, which provides asset backed finance and working capital loans to professional practice firms and finally Trade Finance Partners Limited, a trade finance provider to the SME market.
To find out more about COLG's strategy and its businesses please click on the attached link www.cityoflondongroup.com/about.asp