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Trade Finance Agreement
Capital for Colleagues, the ISDX-quoted investment vehicle focused on opportunities in the Employee Owned Business sector, has agreed to provide a trade finance facility of up to £200,000 to RUA Pipelines Limited, a subsidiary of employee owned TPS Investment Holdings Limited.
TPS is an existing investee company of Capital for Colleagues and is involved in the sourcing, marketing and distribution of a specialist range of pipes, valves, fittings and other associated products for the public utility markets throughout Ireland, with a particular focus on the water market. RUA has been established to manage the bulk import of pipeline related products, principally, but not exclusively, for use by TPS. Sourcing these products in bulk will lower the effective cost to TPS and deliver incremental profit opportunities to the business.
Under its finance agreement with RUA, Capital for Colleagues will make up to £200,000 available for drawdown by RUA, on a transaction by transaction basis, so that it can import stock for use by TPS or for sale to third parties. All advances made to RUA will be guaranteed by TPS and will bear interest at the rate of 2 per cent. per calendar month.
Capital for Colleagues has already invested a total of £300,000 in TPS; £200,000 by way of loan notes bearing an interest rate of 15 per cent. per annum and £100,000 through the acquisition of 100,000 participating preference shares. The ordinary shares of TPS are held by that company’s management (80 per cent.) and an Employee Benefit Trust (20 per cent.). The ordinary shares in RUA are held by TPS (70 per cent.) and the management of RUA (30 per cent.)
John Eckersley, CEO of Capital for Colleagues said, “This trade finance facility underpins our commitment to supporting the development of employee owned businesses. Providing RUA with this facility is a logical way to further enhance value at TPS, an employee owned business where we have already made a meaningful financial commitment.
“We have an active investment portfolio over a number of employee owned businesses in the UK and Ireland and continue to identify new investment opportunities as we build a leading position in the employee owned business sector. I look forward to updating shareholders on future developments and investments in due course.”
