LONDON (Alliance News) - Gresham House PLC Wednesday unveiled a set of proposals that could result in the development of the company into an asset manager, to be funded by raising GBP20.0 million through a share placing, and a move to AIM from the main market.
The proposals would replace Gresham House's current plan to liquidate its assets and distribute the proceeds to shareholders. Gresham House had invested in commercial property, as well as corporate bonds.
Under the proposals, Gresham House would become a listed platform for investment in differentiated and illiquid assets, with the new funds to be used by a new team to create or acquire a fund management business, to act as the cornerstone investor in a strategic public equity fund, and to execute direct investments in public and private smaller companies.
In a statement, Gresham House said that it expects the new team, consisting of new board members and a new management team, to be led by former chief executive and chairman of SVG Investment Managers Tony Dalwood, along with Michael Phillips, the founder and former CEO of iimia Investment Group PLC and Christows Ltd.
Anthony Townsend, a city veteran of more than 40 years, would become the company's chairman. According to Gresham House, one current director would remain on the board until at least December 2015 to help the new team in dealing with existing assets, but the rest of the board intends to resign.
Gresham House said that the new team "considers that the appetite exists for investment in a Gresham House, reshaped along the lines set out above, in particular amongst smaller institutional investors, family offices, wealth managers, private banks and ultra-high net worth individuals." It said it intends to raise a minimum of GBP15.0 million under the placing.
"Early conversations with a limited number of potential investors have resulted in preliminary non-binding indications of interest in subscribing for a significant proportion of the target sum being expressed to the company’s advisers," Gresham House said in a statement.
According to the statement, the new management team intends to invest GBP1.0 million in the company as part of the proposals. The placing price for the shares will be derived by calculating an 11.25% discount to the company's unaudited net asset value on June 30. If shareholders approve the measures, the proceeds of the share issue will be used to provide additional working and investment capital. The new funds also may be used to fund a possible buyback of ordinary shares at some stage once the proposals are implemented.
If any of the resolutions are not approved by shareholders, none of the proposals will proceed.
Under the proposals, each existing shareholder, prior to admission of the new shares, will receive one warrant for every five shares owned, giving them the right to subscribe for one share.
Gresham House shares were Wednesday quoted at 287.15 pence, up 9.4%.