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Adamas Finance Asia to take direct stake in Japanese ski village

ICG is a developer of premium residential projects in the Asia Pacific region, including in Hirafu Village, a ski resort in Niseko, Japan

Adamas Finance Asia Limited -

Investment company Adamas Finance Asia Limited (LON:ADAM) is to acquire a 40% interest in Infinity TNP, a newly formed subsidiary of Infinity Capital Group (ICG).

Adamas will pay ICG £5.63mln for the 40% stake, to be satisfied through the issue of 16.2mln shares at an assumed price of 34.8p per share, giving ICG a 16% stake in Adamas.

WATCH: Full interview: Adamas Finance Asia issues first corporate bond & takes stake in Japanese ski village

Adamas's shares traded at 24p a pop at Friday's close.

Adamas has an existing relationship with ICG, having jointly pumped (with a Hong Kong-based family office) US$4mln into the ski resort developer earlier this year.

ICG and Adamas have now agreed that each company will be entitled to appoint one non-executive director to the other's board.

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On completion of the deal ICG, a property developer of premium residential projects in the Asia Pacific region, will transfer to ICG TNP seven property units in a luxury hotel, 'Tellus Niseko', being built by ICG.

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.

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 the completion of the transaction.

If the dividend is not paid or falls short of the minimum agreed amount, Adamas can return its stake and claw back the shares it has issued to ICG.

"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,” said John Croft, the chairman of Adamas.

Croft said the transaction is a good example of the approach adopted by the company and its investment manager in building strong relationships with its portfolio companies after investing in them.

“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,” Croft said.

In a separate announcement, the company revealed it is to raise in the region of US$1.9mln by issuing a corporate bond.

The bond, which matures in October 2022, will be issued to family offices in the Middle East and carries a coupon of 12.5%. It is secured on the corporate assets of Adamas.

"We are pleased to announce this fresh capital, which will be reinvested in our pipeline of attractive higher income yielding investments in emerging and established small and medium-sized enterprises across Asia,” Croft said.

“The board considers this the most appropriate method to raise the capital that the company currently requires to fund our initial investment pipeline, whilst adding new investors into ADAM and diversifying the company's sources of funding,” he added.

Quick facts: Adamas Finance Asia Limited

Price: 23.5 GBX

AIM:ADAM
Market: AIM
Market Cap: £20.66 m
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Full interview: Adamas Finance Asia issues first corporate bond & takes...

Suresh Withana from Harmony Capital, the investment advisers to Adamas Finance Asia Limited (LON:ADAM), updates Proactive London's Andrew Scott since announcing their first bond issue as well as the news they're to acquire a 40% interest in Infinity TNP, a newly formed subsidiary of...

3 weeks, 4 days ago

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