TIDMCIN
RNS Number : 6903L
City of London Group PLC
17 May 2022
17 May 2022
CITY OF LONDON GROUP PLC
("COLG", the "Company" or the "Group")
Business update
-- Continued support by shareholders with investment of cGBP8.7
million to support the growth and investment in technology of
Recognise Bank Limited ("RBL")
-- Conversion of high cost preference shares into equity
-- Initial strong launch of RBL with origination of cGBP100M
achieved within RBL's first 6 months of obtaining its license
-- Rapid strides toward building a technology team alongside
continued investment to further strengthen lending growth and to
continue to drive efficiency
Further to the announcement made on 25 April 2022, the board is
pleased to announce the exercise of warrants by two of the
Company's shareholders, Max Barney Investments Limited ("MBIL" or
"Max Barney") and Parasol V27 Limited (" PV27"), that were received
by both shareholders in August 2021:
Shareholder Warrants exercised Exercise price
PV27 8,625,000 shares Exercise price of
69p per share
MBIL 833,333 shares Exercise price of
69p per share
The Company will issue 9,458,333 new Ordinary Shares (the
"Subscription Shares") of 2 pence each at the subscription price of
69 pence per ordinary share, raising gross proceeds of
GBP6,526,250.
In addition, the board has agreed to enter into a share exchange
with HPB Pension Trust ("HPB") under which it has agreed to
purchase 2,069,914 preference shares (the "Preference Shares") held
by HPB in the Company's subsidiary Credit Asset Management Limited,
for a consideration of GBP2,179,704, which is to be satisfied by
way of COLG issuing 3,158,992 new Ordinary Shares of 2 pence in
itself, each at a subscription price of 69 pence per new ordinary
share to HPB (the "Share Exchange shares"). The subscription price
represents a premium of 60.5% against the current share price,
being the date prior to the release of this announcement.
The net proceeds will be used to support RBL's continued growth
and invest in technology that will build on the Bank's existing
flexible and resilient platform to launch innovative products,
continue to drive efficiency and deliver an even better customer
experience.
An application has been made to the London Stock Exchange for
admission of the Share Exchange shares to trade on AIM
("Admission"), which will rank pari passu with existing Ordinary
Shares trading on AIM, with Admission expected to become effective,
and that dealings in the shares will commence, at 8:00am on 23 May
2022.
Total Voting Rights
Following Admission, the total issued share capital of the
Company will consist of 119,430,638 Ordinary Shares of 2 pence
each. This number may be used by shareholders as the denominator
for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest
in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.
Amendment to PV27 agreement
As announced on 10 September 2020, the Company entered into an
agreement with PV27 insofar that as the Investor holds more than
30% of the issued share capital, the Company shall, at the request
of a director nominated by PV27, convene a general meeting at which
certain reserved matters shall be proposed for consideration and,
if thought fit, approved by shareholders.
This agreement has been amended only to the extent that the
requirement by COLG to convene a general meeting is carved out to
satisfy the regulatory requirements envisaged in the provisions of
the Prudential Regulatory Authority's 8(th) February 2022
Supervisory Statement SS7/13 on the Definition of Capital.
Related Party Transaction
Max Barney and PV27 are both deemed to be related parties of the
Group under the AIM Rules for Companies, as they each individually
hold in excess of 10% of the total voting rights of the company.
HPB is connected to Max Barney. As such, the Share Exchange by HPB
and the change to the agreement between PV27 and COLG each
constitute 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.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR. The person who
arranged for the release of this announcement on behalf of the
Company was David Jenkins, Group Finance Director.
LEI: 2138003UW63TMQ5ZFD85
For further information, please contact:
Enquiries
City of London Group plc +44 (0)20 3988 6504
David Jenkins (Group Finance Director)
Ben Peters (Head of Investor Relations)
Peel Hunt LLP (Nominated Adviser and
Broker)
James Britton
Rishi Shah
Sam Milford +44 (0)20 7418 8900
For media enquiries, please contact:
Paul Beadle, Head of Communications,
Recognise Bank +44 (0)7801 105001
Paul.Beadle@recognisebank.co.uk
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END
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