London Capital Group Holdings Spins Off LCG Capital, Looks for UK Acquisitions

The deal will turn the brokerage into a private company controlled by Charles-Henri Sabet.

The management of London Capital Group Holdings (LCGH) has decided to dispose of London Capital Group Ltd. The firm that is controlling the brokerage LCG Capital is aiming to divest its portfolio with other acquisitions, as it spins off the unit to an entity controlled by Charles-Henri Sabet. The move follows a delisting from the London Stock Exchange and a listing on NEX Exchange.

The London Capital Group Holdings board of directors has issued a regulatory announcement that together with its wholly-owned subsidiary, Tradex, it has committed to a conditional sale of 91.5 percent of London Capital Group Limited. The deal also includes 100% of the issued share capital of each of the LCG Subsidiaries held by the LCGH and/or Tradex to a company name SLCG International.

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SLCG International is principally controlled by Charles-Henri Sabet, who is the Chief Executive Officer of the brokerage and a shareholder in the major shareholder of LCGH, GLIO Holdings. He entered the company after a debt to equity swap deal was executed in, constitutes a related party transaction under the NEX Rules and section 190 of the Act.

According to the terms of the deal, LCGL has issued loan notes totaling to about £4.6 million at an interest rate coupon of 8 percent. The yield is payable in two equal installments in arrears each year on the 25th of May and the 25th of November. The first payment is due on the 25th of November 2018.

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In the unaudited results for the six months that ended on June 30th 2017, the company recorded a loss of just over £1.8 million. The brokerage has been haemorrhaging cash in recent years, which is the main reason that the directors of the firm made the decision to spin it off.

Following completion of the deal that is pending the approval of shareholders and from the FCA, LCGH will retain an 8.5 percent stake in the brokerage via its shareholdings in Tradex.

Refocusing of Investment Strategy

Following the completion of the deal, the company will seek acquisitions in the UK. The focus is on financial technology companies, businesses, and assets. The official announcement includes nano-payments and micro-payment technologies, as well as other financial services firms.

“LCG Holdings may also seek financial services companies that are FCA authorized to carry out regulated business, such as dealing with investments, asset administration and arranging investment deals. Such a deal may require approval from the FCA for a change of control approval,” the official announcement states.

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