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Conditional Investment into Infinity TNP

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RNS Number : 4414Q
Adamas Finance Asia Limited
21 October 2019
 

 

21 October 2019

ADAMAS FINANCE ASIA LIMITED

(the "Company" or "ADAM")

Conditional Agreement for Equity Investment into Infinity TNP

Adamas Finance Asia Limited (AIM: ADAM), the London quoted company focused on providing shareholders with attractive uncorrelated returns from a diversified portfolio of pan-Asian investments, is pleased to announce that it has signed a conditional share sale and purchase agreement ("SPA") with Infinity Capital Group Limited ("ICG") for the Company to acquire 40% of ICG's wholly owned subsidiary, Infinity TNP ("ICG TNP") (the "Transaction"). Further details of the Transaction are set out below.

 

ICG is a real estate developer of premium residential projects in the Asia Pacific region, including in Hirafu Village, a world-class ski resort in Niseko, Japan - one of the world's most popular winter travel destinations and regularly recognised as a top ten global ski area.

 

On completion of the Transaction, ICG will transfer to ICG TNP (a newly formed special purpose vehicle) seven property units in a luxury hotel condominium being built by ICG, Tellus Niseko (the "Property Units").  The Property Units will be leased out for guest occupation all year round once construction is completed, which is expected in December 2019, in time for the 2019/20 winter season.

 

The consideration due to ICG for the 40% shareholding in ICG TNP is £5,630,400. The consideration will be settled by the Company issuing 16,179,310 ordinary shares to ICG (the "Consideration Shares") at a price of 34.8p per ordinary share (the "Consideration Share Price"). The Consideration Share Price represents a premium of 20% to the 30-day weighted average price per share in ADAM immediately prior to the execution of the SPA. Following the completion of the Transaction, ICG will own approximately 16% of the issued share capital in the Company. Upon completion of the Transaction, ICG and the Company will each be entitled to appoint one non-executive director to the other's board. In the case of ICG, any such appointment is subject to suitability checks and approval from the Company's nominated adviser.

 

As part of the SPA, ICG TNP has agreed to distribute income regularly to its shareholders, which must generate a minimum dividend yield per annum of 6.0% on the agreed equity value of ICG TNP as at completion of the Transaction. If such dividend distribution does not occur in the 12 months following the completion of the Transaction, the Company will have the right to put its 40% shareholding in ICG TNP back to ICG simultaneously with the Consideration Shares being put back to the Company by ICG at no further cost to either party.

 

Completion of the SPA is subject to completion of commercial and legal due diligence and the satisfaction of a number of conditions precedent and subsequent, including:

1.    receipt of an independent valuation report with respect to the Property Units prepared by a global valuation agency evidencing a total valuation of no less than USD20.0 million; and

2.    execution of a shareholders' agreement between ICG and ADAM in respect of their shareholdings in ICG TNP.

 

The Company will make an application for the Consideration Shares to be admitted to trading on AIM and trading is expected to commence within 5 business days of Completion occurring ("Admission"). The Consideration Shares will rank pari passu with the existing ordinary shares in the capital of the Company.

 

Following Admission, the Company's enlarged issued share capital will comprise 104,912,379 ordinary shares. The Company holds 916,804 shares in treasury. The total voting rights in the Company will therefore be 103,995,575 ordinary shares. This figure may be used by Shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

 

A further announcement will be made by the Company when the Transaction has completed.

 

The construction of Tellus Niseko is approaching completion and is progressing on schedule and on budget, with an official opening due in mid-December 2019. Tellus Niseko is currently 95% booked for December 2019 and 80% for January 2020 with growing levels of interest.

 

As previously announced, on 31 January 2019, the Company successfully funded the first of two equal tranches of USD2.0 million of its investment in ICG through a senior secured loan note paying a 17.5% cash coupon payable semi-annually and secured against ICG's real estate assets ("Secured Assets"). On 15 July 2019, the Company announced that a Hong Kong based family office ("Family Office") agreed to co-invest on a 50:50 basis alongside ADAM in ICG, underlining the robust fundamentals of this proprietary deal and the strength of support for the Company, its growth strategy and its Investment Manager. On 30 August 2019, the Company and Family Office funded the second tranche of the existing investment commitment to ICG.

 

John Croft, Chairman of Adamas Finance Asia Limited, commented:

"This Transaction further enhances the Company's capacity to generate regular cash income from an attractive investment in its portfolio and, when coupled with the issuance of shares in the Company at a significant premium to the current share price, it helps to support the underlying valuation of the Company and its growth strategy.

 

This Transaction illustrates the Company and its investment manager's approach to building strong relationships with its portfolio companies following investment. We look forward to working with ICG and supporting the next phase of its attractive growth story. 

 

This Transaction is in line with ADAM's investment policy and helps to ensure the Company commences dividend payments to shareholders in due course, whilst also providing investors with the potential for capital and income growth from the Company's asset portfolio."

 

For further information, please visit the Company's website at http://adamasfinance.com and follow the Company on Twitter (@AdamasFinance).

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

Adamas Finance Asia Limited

+44 (0) 1825 830587

John Croft




WH Ireland Limited - Nominated Adviser

+44 (0) 20 7220 1666

James Joyce


James Sinclair Ford




VSA Capital Limited - Joint Corporate Broker

+44 (0) 20 3005 5000

Andrew Monk


Andrew Raca




Pello Capital Limited - Joint Corporate Broker

+44 (0) 20 3700 2500

Tim Sohal




Maitland/AMO - Communications Advisor

+44 (0) 20 7379 5151

James Benjamin


Peter Hamid


 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

 

About Adamas Finance Asia

Adamas Finance Asia Limited (ADAM) is quoted on the AIM Market of the London Stock Exchange and is committed to providing shareholders with attractive uncorrelated, risk adjusted long-term returns from a combination of realising sustainable capital growth and delivering dividend income.

 

The Company is focused on providing growth capital and financing to emerging and established Small and Medium Enterprises (SME) sector throughout Asia, well diversified by national geographies, instruments and asset classes. This vital segment of the economy is underserved by the traditional banking industry for regulatory and structural reasons.

 

The Company's investment manager, Harmony Capital, seeks to capitalise on its team's established investment expertise and broad networks across Asia. Through rigorous diligence and disciplined risk management, Harmony Capital is dedicated to delivering attractive income and capital growth for shareholders with significant downside protection through selectively investing in assets and proactively managing them.

 

Harmony Capital is predominately sourcing private opportunities and continues to create a strong pipeline of attractive income generating assets from potential investments in growth sectors across Asia, including healthcare, fintech, hospitality, IT and property. 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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Quick facts: Adamas Finance Asia Limited

Price: 23.5

Market: AIM
Market Cap: £20.66 m
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on 23/10/19