GLIF acquires BMS Finance AB
GLIF, a Guernsey-domiciled authorised closed-ended investment company investing principally in corporate loans across multiple sectors, has entered into an asset sale and purchase agreement with BMS Specialist Debt Fund for certain BMS assets.
In order to satisfy the consideration payable under the asset sale and purchase agreement of approximately GBP11.6m in aggregate, the company has agreed to issue up to 23,322,056 ordinary shares to the seller, although the company may, in its discretion, elect to settle part of the consideration in cash.
Completion of the asset sale and purchase agreement is conditional on admission of the ordinary shares issued to the seller to trading on the AIM market of the London Stock Exchange and to the Official List of the Channel Islands Stock Exchange.
GLIF is seeking new investment opportunities in order to put the capital that is becoming available to work and diversify its portfolio.
The sssets that the company has agreed to purchase comprise all of the issued share capital of BMS Finance AB, which is a UK-based specialist private finance company. BMS Finance AB is currently financed by a deep discount bond issued to the seller currently standing in the nominal sum of GBP20,738,000 (the DDB) and this is also being acquired by the company pursuant to the asset sale and purchase agreement.
In addition to the shares in BMS Finance AB and DDB, the company is also acquiring the seller’s interest in Noble Venture Finance II and legacy warrants to subscribe for shares in Eazyfone and EGS Group.
The business of BMS Finance AB was founded in 2005 and, since then, has focused on providing senior lending to small to medium-sized enterprises that have been unable to access funding from banks. It relies on the cashflow and profitability of the borrower to service the loan, rather than on a particular asset.
The typical loan size is GBP500,000 to GBP3m to borrowers with turnover of less than GBP25m. Normally, loans are advanced for a period of three years with monthly amortisation, although alternative repayment schedules may be offered depending on the security and/or cashflow profile of the borrower. Interest is generally charged at a rate of between 10 and 14 per cent per annum.
Over the past five years, the average return on its loan portfolio was 12 per cent per annum. Its gross assets at 31 March 2012 were GBP9,749,181.
BMS Finance AB will continue to be managed by its existing management team: Ewan Stradling, Martin Ling and Shane Lanigan.
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