LONDON (SHARECAST) - AIM-quoted Astaire Group has agreed to sell its last remaining operating subsidiary Rowan Dartington and this could enable it to return some cash to shareholders even though the AIM-quoted company is receiving loan notes and shares in consideration.
In a complicated deal, RDH, which was formed by a consortium of private investors led by Graham Coxell, will issue £1m of loan notes, repayable in five years or on a sale of the business, and 30% of its shares to Astaire in return for acquiring Rowan Dartington. The investors will own the other 70% of RDH and they will invest £800,000 in RDH loan notes to provide working capital.
There are a number of potential cash adjustments relating to the sale, including the purchase by Astaire of £650,00 of investments in Rowan Dartington’s Isambard Fund.
Assuming that the sale of Dowgate Capital Stockbrokers goes ahead as planned, Astaire will have £930,000 of cash with a further £362,000 in escrow relating to the sale of Astaire Securities. A subsidiary, CS Group, has £3m in cash but this is being kept in this company to cover any expenses and claims relating to the litigation with Izodia.
Once liabilities, including tax, are covered Astaire will consider any excess cash to shareholders – not including the CS cash. Astaire does have some quoted and unquoted investments, including a stake in Euroclear. These will be liquidated over time but there will be no fire sale.
There are no immediate plans to cancel the AIM quotation.