TIDMECP
RNS Number : 6704J
Eight Capital Partners PLC
25 August 2021
25 August 2021
Eight Capital Partners plc
("ECP", "Eight Capital" or "the Company")
Purchase of EUR40million 2.5% Fixed Rate Secured Bonds from IWEP
Limited at par value
Significant increase in ECP's gross asset base
Eight Capital Partners plc (AQSE: ECP), the investing company
whose investment strategy focuses on technology, media, telecoms
and financial services businesses including listed investing
companies, is pleased to announce that, following shareholder
approval pursuant to Section 190 of the Companies Act 2006 at the
Company's recent AGM, it has acquired EUR40million 2.5% fixed rate
secured bonds ("Bonds") from IWEP Limited ("IWEP"), a company
controlled by ECP's Chairman, Mr Dominic White.
Eight Capital intends to scale-up its business significantly in
the coming months starting with this acquisition and it is expected
that it may include the conversion of a number of existing loans
into equity and a share placing. The objective is to grow the
equity value of the Company such that it establishes a strong
equity base from which to grow its operations, and, subsequently,
becomes increasingly attractive to investors.
The Bonds were issued to IWEP by 1AF2 Limited, a private company
registered in England which is a wholly owned subsidiary of The
Avantgarde Group S.p.A. ("TAG"), an Italian private holding company
invested in the fintech sector, in settlement of the acquisition of
assets by TAG from IWEP.
The Bonds have been purchased at par value plus accrued but
unpaid interest from the date of issue of the Bonds to the date of
their acquisition in the sum of EUR150,684. The Bonds carry a fixed
rate coupon of 2.5% per annum plus a potential equity linked
payment at redemption which gives bondholders the opportunity to
participate in the performance of the underlying security package.
The Bonds have a maturity date of 30 June 2024. Interest due on the
Bonds can be paid in cash or listed securities, to an equivalent
value, and is payable on the date falling four calendar months
after the 1 July 2021, each date falling four calendar months
thereafter and the first business day following the third
anniversary of the issue of the Bonds. They are secured by a
security package held by The Bank of New York Mellon, acting as
custodian, which may be called upon by a trustee (a company
controlled by Dominic White) who represents the bondholders in the
event of default. The terms of the agreement for the issue of the
Bonds require periodic review and revaluation of the security
package, and provide mechanisms for its modification if required,
and additionally include a parent company guarantee by TAG which
may be exchanged for a specific asset pledge in the future, subject
to the trustee accepting this change on behalf of bondholders. The
Company understands that it is the intention of TAG to list the
Bonds on a European stock exchange in due course.
Consideration for the acquisition of the Bonds, including the
accrued, unpaid interest, has been settled by a one year vendor
loan ("Vendor Loan"), as described in the AGM notice and approved
by shareholders on 6 August 2021, for the full par value of the
Bonds and bearing interest at a fixed rate of 1.5% per annum due on
repayment. The Vendor Loan may be repaid in full at any time and
ECP can make partial repayments from time to time. In the event of
a default on the repayment of the Vendor Loan, interest will accrue
at a rate of 2 per cent. above the Bank of England Base Rate per
annum. The transaction is, therefore, expected to provide ECP with
a 1% per annum net interest income from the Bonds in the first year
which is expected to be EUR400,000.
The Vendor Loan is intended to be repaid by the raising of new
equity capital and the issue of other securities by the Company in
stages, in the short-term. This may include an equity placing via
an open offer to all shareholders. Warrants and/or other securities
may also be included in the capital raise.
The ECP Board believes that the significant increase in size of
the gross assets of the Company following the Bonds purchase,
combined with an intended open offer to all shareholders to
subscribe for new securities as well as the confidence demonstrated
by the Board in completing the transaction, may enable it to
significantly strengthen its balance sheet and further increase the
equity value of ECP.
ECP Chairman, Dominic White commented:
"This transaction affords a much stronger base from which ECP
can further develop as a technology-led growth company focussed on
financial services, fintech, decentralised finance and banking
technology. It also increases shareholder value by significantly
enhancing gross asset value together with the potential for an
equity performance linked payment at bond redemption.
"We have been developing a deep-value investment model over
several years that involves using securities and transaction
structure to deliver attractive business acquisitions and
combinations, that target asymmetrical returns for shareholders.
Together with enhancing the team quality and operations of acquired
companies, this can result in outsized investment returns to
shareholders.
"We expect that ECP will begin to take shape and grow more
rapidly following this first step. We will be nurturing earnings
potential and structuring for further growth in our operating
subsidiaries, and upcoming investments. We believe that our ability
to invest in private and public debt and equity, as well as own
operating companies and passive investments, gives us a competitive
advantage and high levels of structuring flexibility that can help
to maximise returns. We have a great pipeline of opportunities that
we intend to deliver through this business model in the coming 24
months."
Dominic White, a director of the Company, is also a director and
the beneficial owner of IWEP. Pursuant to AQSE Rule 4.6, the
purchase of the Bonds from IWEP by the Company therefore
constitutes a related party transaction. Pursuant to Section 190 of
the Companies Act 2006, the transaction was presented to
shareholders who approved it at the Company's recent AGM. Mr White
has not taken part in any deliberations by the Board in respect of
the acquisition of the Bonds.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
Eight Capital Partners plc +44 20 3808 0029
Dominic White info@eight.capital
Cairn Financial Advisers LLP
AQSE Corporate Adviser
Jo Turner / James Lewis +44 20 7213 0880
Walbrook PR Limited +44 20 7933 8780
Paul Vann/Nicholas Johnson Paul.vann@walbrookpr.com
About Eight Capital Partners:
Eight Capital Partners plc is an international investing company
whose investment strategy focuses on technology, media, telecoms
and financial services businesses, including both privately-owned
and listed entities. It has recently refined its strategy to focus
increasingly upon investing in those businesses engaged in
"Fintech" operations, from the digitisation of banking services,
through to blockchain-backed decentralised finance companies and
"crypto banks".
ECP provides equity, debt, and equity-related investment capital
to companies seeking capital for growth and development,
consolidation or acquisition, or pre-IPO financing. The Company
seeks to generate an attractive rate of return for shareholders,
predominantly through capital appreciation, by taking advantage of
the increasing number of investment opportunities within the
continuously developing global technology, media, telecoms and
financial services sectors.
About Eight Capital Partner's wholly-owned subsidiaries
Epsion Capital:
Epsion Capital is an independent corporate advisory firm based
in London with an extensive experience in UK and European capital
markets. The team of senior and experienced ECM and M&A
professionals is specialised across multiple markets, sectors and
geographies and it prides itself on a commercial approach that
allows the clients to achieve their growth ambitions.
www.epsioncapital.com/
Innovative Finance:
Innovative Finance is a corporate finance advisory business that
develops mergers and acquisitions and financing solutions across
multiple sectors, primarily in Europe, with access to international
transactions. It is currently working on transactions in the USA
and Europe which are linked to technological developments in the
financial services industry, AI, Cybersecurity, Ecommerce and
Cannabis.
www.eight.capital
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END
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