REG - Caledonian Holdings - Investment in AlbaCo Limited

Caledonian HoldingsAnnouncement

Tue 07:00

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RNS Number : 0954M  Caledonian Holdings PLC  10 June 2025

10 June 2025

Caledonian Holdings plc

("Caledonian Holdings" or "the Company")

 

Investment in AlbaCo Limited

Related party transaction

 

The Board of Caledonian Holdings plc (AIM:CHP), an AIM-quoted investing
company focused on the financial services market, is pleased to announce that
the Company has conditionally agreed to invest an aggregate of £1,000,000 in
AlbaCo Limited ("AlbaCo"). AlbaCo aims to be Scotland's first bank solely
dedicated to lending to small and medium sized businesses in Scotland and the
wider UK regions.

Highlights

·      £750,000 to be invested in AlbaCo in cash

·      Intention to invest a further £250,000 in AlbaCo in the form of
new ordinary shares in Caledonian Holdings

·      Caledonian Holdings' first investment in the financial services
sector following implementation of revised investing policy

The Company has entered into an agreement to invest £750,000 in AlbaCo
through the purchase of 750,000 new ordinary shares in AlbaCo at a price of
£1.00 per share (the "Share Purchase"). The Share Purchase is to be satisfied
in cash from the Company's existing cash resources. Completion of the Share
Purchase is expected to occur upon payment of funds to AlbaCo in the coming
days. On completion of the Share Purchase the Company is expected to have an
interest in 2.73% of the issued share capital of AlbaCo.

The Company also intends to acquire 250,000 existing ordinary shares in AlbaCo
at a price of £1.00 per share through the issue of 5,797,101,449 new ordinary
shares in the Company (the "Consideration Shares") at a price of 0.0043125p
share (the "Share Swap", and together with the Share Purchase, the
"Investment"), being a 15 per cent. premium to the Company's closing
mid-market share price of 0.00375p on 9 June 2025. Before proceeding with the
Share Swap, the Company is required to commission a valuation report for the
purposes of Section 593 of the Companies Act 2006 as the Company's intention
is to issue the Consideration Shares for non-cash consideration. Pursuant to
the Share Swap, the Company would be acquiring 250,000 shares in AlbaCo that
are beneficially owned by Jim McColl, Executive Director of the Company.

Jim McColl (Executive Director and substantial shareholder of the Company) is
the founder, a non-executive director and major shareholder in AlbaCo.

The Investment represents Caledonian Holdings first investment into the
financial services sector following the fundraising, change of investing
policy and board changes which took place earlier this year.

Rationale for Investment

The independent directors of Caledonian Holdings (being Chris Cooke and Brent
Fitzpatrick) have met with the full executive team at AlbaCo as well the CEO
and CFO specifically for the purpose of furthering due diligence on AlbaCo as
part of the Investment.

AlbaCo has a unique regional proposition and is utilising new technology, an
experienced team, and are expounding a unique appeal to the under-served
Scottish and provincial English and Welsh small and medium-sized enterprise
("SME") communities where the demand for a relationship with a
customer-centric bank is high.

AlbaCo has advantages over the big, established banks due to its bespoke
technology developed solely for their unique purpose. It is also
differentiated, as a result of a strong local and regional appeal with a
central ethos of relationship banking and customer centricity. Their
investment in customer relationship directors and managers and a dedicated
team of customer facing people provides the platform for this approach.
Focusing initially on Scotland and the north of England, AlbaCo intends to be
strong in these areas where the SME community and independent business owners
have been neglected and are keen for a supportive relationship with their
financing partner.

AlbaCo has the usual benefits of a challenger bank but with further
differentiation through the strong regional appeal and the dedication to SMEs
who are able to speak with people and not just chatbot and AI. It meets with a
cross party belief in government that the access to strong financial advice
and support is lacking for SMEs.

The Board of Caledonian Holdings believe that the financial prospects for
AlbaCo are very encouraging and it is understood that these have been tested
by the regulators as part of their licensing case. The award of a full
banking licence is, we understand, imminent.

Substantial investment from successful Scottish business people, family
offices, a former challenger bank founder, and a European capital investor has
already been obtained by AlbaCo and the Board of Caledonian Holdings
understands that discussions are under way and progressing very well for
AlbaCo to raise additional funding upon, or following, receipt of a full
banking licence.

The Investment is an important first step for Caledonian Holdings as a
business with a new board, and a revised investing strategy focusing on
financial and payment services. It forms a powerful basis for this new mission
and purpose and a foundation upon which the Board of the Company will look to
grow shareholder value.

Information on AlbaCo

AlbaCo aims to be a new bank with a clear vision and purpose - to support
small and medium-sized businesses as they develop their aspirations, grow and
realise their potential. AlbaCo aims to help SMEs grow by applying specialist
expertise and insight while forming strong and lasting relationships with its
customers. AlbaCo is not yet open to trade pending full regulatory banking
approval.

For the year ended 29 February 2024, AlbaCo reported a loss after tax of
approximately £8.96 million. As at 29 February 2024, AlbaCo's net assets were
£6.31 million.

For further information, see albacoltd.co.uk (https://www.albacoltd.co.uk/) .

Related party transaction

Jim McColl, director and substantial shareholder of the Company and therefore
a related party as defined by the AIM Rules for Companies ("AIM Rules"), is
also a director and shareholder of AlbaCo. Accordingly, the Share Purchase
constitutes a related transaction party for the purposes of Rule 13 of the AIM
Rules. The directors independent of the Share Purchase (being Chris Cooke and
Brent Fitzpatrick) consider, having consulted with the Company's nominated
adviser, that the terms of the Share Purchase are fair and reasonable insofar
as the Company's shareholders are concerned.

Given Jim McColl is a related party as defined by the AIM Rules, if the Share
Swap were to proceed, it would likely constitute a related party transaction
for the purposes of Rule 13 of the AIM Rules.

The Company will make a further announcement regarding the Share Swap as
appropriate.

Chris Cooke, Non-Executive Director of Caledonian Holdings, commented:

"The Investment marks what we hope will be the first of a number of dynamic
transactions and investments aimed at building Caledonian Holdings into a
successful investor in innovative financial and payment services businesses.
We thank shareholders old and new for their support."

 

For further information, please contact:

 Brent Fitzpatrick, Non-Executive Chairman    Tel: +44 (0) 7950 389469
 Allenby Capital Limited (Nominated Adviser)  Tel: +44 (0) 20 3328 5656
 Nick Athanas / Piers Shimwell

 Peterhouse Capital Limited (Broker)          Tel: +44 (0) 20 7469 0930

 

 

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