CITY OF LONDON GROUP PLC
("COLG" or "the Company")
Milton Homes sale
Following the announcement on 23rd August 2021, the Board of COLG (AIM:CIN) is pleased to announce today that it has signed a sale and purchase agreement for the sale of Milton Homes Limited ("Milton").
COLG has entered into an agreement to sell the entire issued share capital of Milton and its wholly owned subsidiaries to Max Barney Investments Limited ("MB") for a total consideration of £9.3 million (the "Disposal").
The net proceeds from the Disposal are intended to contribute to the regulatory capital of its subsidiary Recognise Bank Limited. This sale is in line with the Company's approach to develop a new UK SME bank.
The Disposal is conditional on receiving regulatory approval from the Financial Conduct Authority of the change in control of Milton and of its lender. The Disposal is classified as a substantial transaction under AIM Rule 12. In the financial year ended 31 March 2020, Milton reported profit before tax of (£2.6) million, had total assets of £69.3 million and net assets of £2 million.
The consideration of £9.3 million will be funded by way (i) the acquisition and cancellation of an intercompany loan of £7.8 million between the Company and Milton by HPB Pension Trust, an entity associated with MB, which will occur immediately; (ii) a payment of £1.2 million by MH to the Company utilising excess cash on its balance sheet which will occur immediately and (ii) a payment of £0.25m by MB to the Company which will occur on completion.
Related Party Transaction
MB and HPB Pension Trust are deemed to be related parties of COLG under the AIM Rules for Companies, as it holds in excess of 10% of the total voting rights of the Company. As such, the Disposal constitutes a related party transaction under Rule 13 of the AIM Rules for Companies (the "Related Party Transactions").
The independent directors of the Company, having consulted with Peel Hunt LLP in its capacity as the Company's nominated adviser for the purposes of the AIM Rules, consider the terms of the Related Party Transactions to be fair and reasonable insofar as the Company's shareholders are concerned.
LEI: 2138003UW63TMQ5ZFD85
Enquiries
| City of London Group plc Michael Goldstein, Chief Executive Officer Ben Peters, Director of Investor Relations
|
+44 (0)20 3988 6501 +44 (0)20 3988 6500 |
| Peel Hunt LLP (Nominated Adviser and Joint Broker) | +44 (0)20 7418 8900 |
| James Britton, Rishi Shah
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| | |
| For media enquiries, please contact: Heather Armstrong Tim Pearson
|
heather.armstrong@tavistock.co.uk / 07929-116860 Or email colg@tavistock.co.uk |
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