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.
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.