City of London Group (LON: CIN) intends to obtain shareholder approval for its winding up and distribute its stake in new bank Recognise Bank to them. Shareholders owning three-quarters of the company have indicated that they will vote in favour of the proposal.
City of London Group will leave AIM and be placed into a members’ voluntary liquidation. There will then be a pro rata distribution of shares in Recognise Bank to City of London Group shareholders. The general meeting will be held on 25 January.
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All the other businesses and investments have been sold. The costs of the liquidation are likely to be £880,000.
Recognise Bank obtained a banking licence and launched personal and business savings products in September 2021. Jean Murphy took over as chief executive of Recognise Bank in August. Deposits reached £127.9m at the end of September 2022, while the loan book was £112.1m.
City of London Group’s largest shareholder PV27 has agreed to invest £25m in Recognise Bank at 106p a share. This should be completed next February. That share price provides a valuation for the City of London Group stake of 30p for each of the company’s shares.
At the end of September 2022, City of London Group had net assets of £39.9m, which includes intangible assets of £993,000. The City of London Group share price slumped by 242% to 40p on the news of its plans. The market capitalisation is £47.8m. In 2021, £13.4m was raised at 60p a share.
Asset Match will provide a matched bargain facility for Recognise Bank shares.
