Challenger Acquisitions (LON:CHAL), one of London’s standard listing cash shells, has confirmed it has now entered into deals that will see it become a fully-fledged company.
Having received an injection of capital earlier this month the group has now signed a letter of intent to acquire Starneth, a specialist in giant observation wheels.
Starneth is led by the engineers behind the London Eye landmark attraction and is now working on similar projects in Dubai and New York.
Challenger has also agreed to invest directly in the New York Wheel project, committing US$3mln in return for 2.463% interest in New York Wheel Investor LLC (NYWI).
Mark Gustafson, Challenger’s executive chairman, said: "Our investment in the New York Wheel project combined with the pending acquisition of Starneth provides an excellent platform for developing a scalable business for our shareholders.”
NYWI is responsible for providing the equity funding element of the project, which aims to become of New York’s great landmark attractions alongside the Statue of Liberty and the Empire State Building.
The New York Wheel, which will be bigger than the London eye, will be located on Staten Island and is planned to be 630 metres high with 36 passenger capsules as well as terminal and retail buildings.
It will be the largest observation wheel in the world. It will have the potential to carry 1,440 at a time and as many as 30,000 visitors per day and more than 4mln people each year.
Challenger, under the terms of the investor agreement, may be called on to make further contributions to the project in the future.
The separate Starneth letter of intent will see Challenger acquire the the principal operating businesses of Starneth.
Starneth is a specialist engineer which, according to Challenger, has a unique capability to deliver giant observation wheel projects on a fixed-cost, turnkey basis. The team comprises a number of people behind the design and construction of the London Eye.
The transaction will be a reverse takeover and will involve the issue of new equity.
A deal to acquire Starneth will consist of a fixed cash payment as well as the issue of new shares in the listed company.
It is envisaged that upon completion the company’s shares will be listed on London’s main market.