News blog
Creon Corporation
- BY: Andrew Hore |
- POSTED: 03/10/2008 |
Creon Corporation has unwound its recent acquisition of Pinnacle Plus.
Creon was set up to provide mezzanine finance to small and medium sized residential property developers. At the beginning of July 2008 it announced that it was moving into the ground support systems sector by acquiring Pinnacle Plus for up to £1.15m in shares.
Pinnacle Plus designs and manufactures the Vehicle Telematics Information System for companies operating ground support equipment at airports. The business is being sold to a new company mainly owned by Pinnacle Plus’ management for £1. The £400,000 of funding provided to the business is being converted into preference shares bearing a coupon of 7%. They are redeemable within five years.
Creon has not had the cash to provide sufficient working capital to Pinnacle Plus. It expected to raise money from repayments of mezzanine loans but these have not be repaid because of the weak UK property market.
Creon will have to make significant provisions against its mezzanine loan book. They will be announced along with its interim figures at the end of October.
At 21.5p a share, Creon is valued at £2.59m.
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