Tertre Rouge Assets (LON: TRA) has commenced formal marketing for a fundraising to finance acquisitions. Trading in the shares was suspended at 65p on 27 July when the acquisitions were initially announced, while the issue price of the latest fundraising could be 105p. Approval by the FCA of the prospectus for the readmission of the shares to the standard list is still awaited.
Shell company Tertre Rouge Assets is attempting to raise up to £50m to buy rare cars and acquire cash generative businesses involved in supercar events. It has entered into a purchase agreement for a 1972 Lamborghini Miura P400 SV for £2.8m, which means that there are purchase agreements for six cars valued at £31.4m. They are worth between £1m and £10m each.
There is a limited and declining supply of collectible automobiles. According to Knight Frank the value of vintage cars has increased by 185% over the past decade. The plan is to generate gains on these investments -15% annual returns are targeted – while hiring them out to photoshoots and other income generating activities to cover overheads.
The Run To Group Ltd, which organises supercar adventures to the Monaco Grand Prix, will also be acquired and management will remain with the business. This is expected to cost £4.6m.
The group’s board of directors includes racing drivers Mika Hakkinen, David Coulthard and Allan McNish and businessmen.
In July 2022, Tertre Rouge Assets raised £1.17m at 50p/share. There was £404,000 in the bank at the end of September 2023. There should be cash left over to buy other companies and collectible cars.
If the company can earn enough from hiring out the cars and from The Run To Group to cover the group costs, then the net asset value can be preserved while the company awaits the longer-term growth in the values of the cars. The company provides a lower risk and affordable way of gaining exposure to the collectible cars market.
