Kingswood Holdings, the international, vertically integrated wealth and investment management group, has completed a conversion of preference shares which gives its private equity backer 68.4% of the AIM-listed company’s equity.
In a statement on 31 May, Kingswood said Pollen Street Capital’s wholly owned subsidiary HSQ Investment will be beneficially interested in the total of 469,263,291 ordinary shares of the enlarged issued capital of the company.
This follows the anticipated approvals by regulatory authorities in the US, UK and the Republic of Ireland, which sees the convertible preference shares convert at the agreed conversion price of 16.5 pence per ordinary share.
On completion the Company’s enlarged issued share capital will be 686,184,011 ordinary shares, all of which will be admitted to trading on AIM.
Kingswood and HSQ are “in discussions in relation to the treatment and settlement of the accrued dividends on the Convertible Preference Shares and a further announcement will be made in due course”, the statement said.
HSQ has indicated to Kingswood that “its current intention is to maintain the listing of the Company on AIM and has entered into a relationship agreement with the Company, which provides that any dealings between the Company and HSQ will be at arms’ length and that the Company will continue to have at least two independent directors.”
As agreed by shareholders at Kingswood’s general meeting on 30 September 2019 in relation to the waiver of any future application of Rule 9 of the Takeover Code, the conversion of the convertible preference shares will not trigger an obligation on HSQ to make an offer for the Company under the Takeover Code.
David Lawrence (pictured), Kingswood Group CEO said: “This conversion substantially completes the funding structure entered into with Pollen Street Capital in 2019. The financial and broader support of Pollen Street has enabled a transformative period for the business from 2019 to date, and this conversion makes for a clearer, simpler capital structure which we hope will be welcomed by investors.”
Lindsey McMurray, managing partner of Pollen Street Capital said: “Kingswood continues to go from strength to strength with the wealth management sector presenting attractive opportunities for both organic growth and the consolidation of accretive bolt-on acquisitions. We look forward to continuing to work with the business to achieve its growth ambitions.”