Alexander Forbes has reached an agreement with VenFin to buy back £100m exchangeable bonds held by VenFin.
The deal comes ahead of the maturity date of the bonds in September 2005, after which they can be exchanged for either cash or shares.
VenFin provided Alexander Forbes with £100m in 2000 to help the group fund its international growth strategy, said the company. Since then the international business has grown to the point where it now contributes around 40% of the group's trading profits.
Alexander Forbes group chief executive Rael Gordon said: “We are very excited to have reached resolution on the bonds well ahead of maturity and at a fair price to all stakeholders.
“This represents a unique opportunity to recapitalise Alexander Forbes. It strengthens our balance sheet and provides a more flexible capital structure to allow us to pursue our growth strategy to increase shareholder value.
“Pending shareholder and regulatory approvals, VenFin will invest £100m in Alexander Forbes equity, representing 24.96% of our enlarged share capital. This allows us to continue to build on the long and mutually beneficial relationship Alexander Forbes has had with VenFin.”
Gordon said the transaction represented a key milestone in the development of the Alexander Forbes group. “We will be left with a stronger balance sheet and well positioned to pursue our growth strategy.”
