22 February 2008
AIM-quoted Merchant House Group plc (MHG) is pleased to announce that its jointventure asset and leasing finance business Merchant House Finance (MHF), is to embark on a fundraising of up to £1 million to underpin further growth.
Merchant House Group holds a 49% stake in MHF, with an option to go to 75%. The balance is held by Industrial Investment Group Limited, an established leasing and asset finance business.
The cost of exercising the option to acquire up to 75% of MHF is based on a multiple of distributable post tax profits of the joint venture as at December 31, 2009, with a top up mechanism of 10% of any increase in distributable joint-venture profits in the two following years.
MHF is an associate company and one of five units within MHG, which has recently announced a series of restructuring steps to enhance margins by increasing deal-flow and reducing overheads. MHF specialises in providing or arranging leasing and asset finance either as a principal or as an intermediary or adviser.
MHF has recently completed a financing arrangement for Countryliner Ltd, a Surrey based bus and coach operator, and completed the funding for the acquisition of a small cruise ship for Scotland’s Majestic Line. Other recent deals include a promissory note discounting for a major European airline and the leasing of a superyacht to the Chairman of a major PLC.
MHF also last month signed a new strategic partner agreement with The Practice Loan Company plc to offer financing for legal practices and other professionals seeking amounts of more than £250,000 to fund operating costs.
MHF Chief Executive John Lutterloch said: “We are very pleased with these recent developments. They follow a maiden year of solid progress that has put in place a team of 11 senior professionals to drive further growth, and a number of key strategic partner agreements.”
Alongside MHF, MHG also comprises Merchant Capital Ltd, Merchant Stockbrokers Ltd, Merchant Wealth Management Ltd, and Merchant Legal LLP - all structured to minimise overheads and maximise the opportunity for cross-referrals.