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(Sharecast News) - Trafalgar Property announced the acquisition of a 10% equity stake in Hilton House, a commercial property in central Stockport, Manchester, from director Paul Elliott on Tuesday, for 0.35m in a deal classified as a substantial transaction under AIM rules.
The company said the consideration comprised 0.11m through the issue of 366.7 million new shares at 0.03p each, giving Elliott a 29.43% stake in the company, with the remaining 0.24m satisfied via an unsecured convertible loan note.
Conversion of the loan note would be subject to shareholder approval if it would result in Elliott's stake rising above 29.9%.
Hilton House, valued at 3.5m, is a vacant 1970s office complex with potential for redevelopment into a residential or mixed-use scheme, subject to planning consent.
Trafalgar's 10% stake entitles it to 10% of future rental income and 10% of any sale proceeds.
The deal constituted a related party transaction under the AIM rules due to Elliott's position as a director.
Trafalgar's independent directors, having consulted with the company's nominated adviser, Spark Advisory Partners, said they considered the terms to be fair and reasonable for shareholders.
Admission of the new shares to trading on AIM was expected on or around 4 July.
Following admission, Trafalgar's total issued share capital would be 1.25 billion shares.
At 1230 BST, shares in Trafalgar Property Group were down 16% at 0.04p.
Reporting by Josh White for Sharecast.com.
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