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Challenger Acquisitions to increase stake in New York Wheel

“We strongly believe that an investment in this iconic project represents exactly why Challenger was created," Gustafson said.
Challenger Acquisitions to increase stake in New York Wheel
A 640ft observation wheel will take in the New York skyline

Challenger Acquisitions (LON:CHAL) is to increase its stake in the New York Wheel project with a US$1mln investment.

The company already has a 2.4% interest in the US$500mln project, to erect a 630ft observation wheel on Staten Island, as well as an adjoining terminal and retail development, and its stake will now increase to 3%.

Construction work began on Staten Island in May 2015, and the attraction is anticipated to open in mid-2017.

It is a key focus for Challenger, which completed a reverse takeover last year and now has interests in a number of ‘big wheel’ projects as well as the project management teams that help develop them.

"We are delighted to increase our investment in the New York Wheel project,” said Mark Gustafson, Challenger chief executive.

He added: “We strongly believe that an investment in this iconic project represents exactly why Challenger was created and that the value of this investment will grow significantly as this project approaches its mid-2017 opening date. 

“In the meantime we continue to evaluate our pipeline of 25 giant observation wheels worldwide, where our involvement could range from design through to investment, and look forward to providing updates throughout 2016."

To facilitate the new investment, Challenger is issuing convertible loan notes.

It told investors that the notes aggregate principal would by £4mln, with £1mln initially issued. The debt will carry 8% annual interest and can be converted at a price of 80p per share. And the debt is secured against some of the company’s interest in New York Wheel Investor LLC vehicle.

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