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Challenger Acquisitions given more time to pay by Starneth sellers

The payment had been due last month but has been deferred, although Challenger will pay 5% interest on the owed amount

Jakarta, Indonesia
Challenger should be in a position to make the payment when financial close is achieved on the Jakarta big wheel project

Challenger Acquisitions Limited (LSE:CHAL) has negotiated a deferred payment due to the company that sold it Starneth, the designer and builder of giant observation wheels.

Challenger had agreed to pay for the purchase of Starneth in instalments, and was due to make a payment on 15 July, 2016, but the three sellers of Starneth have agreed to a new payment schedule.

The payment of €1.25 million that was due on 15 July 2016 will now be paid on the financial closing of the Jakarta big wheel project if it occurs before 15 January, 2017, otherwise 50% of the balance will be paid on 15 January, with the remainder being due on 15 April (assuming the Jakarta project does not complete in the interim).

The deferred payment has been accruing interest of 5% since 16 July 2016 and is secured by one common equity unit of New York Wheel Investor LLC held by Challenger until the entire cash payment has been made.

“We wish to thank the three Starneth vendors for their flexibility on this matter,” said Mark Gustafson, Challenger’s chief executive officer. 

“We believe the revised terms provide a more appropriate alignment of stakeholders in Challenger," Gustafson.

Shares in Challenger rose 3.2% to 20.25p on the news.

Quick facts: Challenger Acquisitions Limited

Price: 0.13 GBX

LSE:CHAL
Market: LSE
Market Cap: £410.2 k
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