ECIT Eclectic Inv Co

 

TIDMECIT 
 
RNS Number : 3136K 
Eclectic Investment Company PLC 
16 April 2010 
 

                        ECLECTIC INVESTMENT COMPANY PLC 
 
                  Investment in Bermuda Commercial Bank Limited 
 
Eclectic Investment Company PLC ("Eclectic") announces that it has invested 
GBP6.5m in a new investment, Bermuda Commercial Bank Limited ("BCB"). 
 
Bermuda Commercial Bank 
 
BCB is a Bermuda listed and licensed bank serving the domestic and international 
corporate and personal high net worth markets. It has operations in custody, 
fund administration and corporate services.  BCB has been conservatively 
managed, with no lending exposure, and therefore no exposure to sub prime assets 
or real estate loans.  As a result of this conservative business model, BCB has 
a strong balance sheet with capital ratios in excess of 30% but incurred trading 
losses in its last financial year arising from shareholders' funds being 
invested in the current low US$ interest rate. 
 
As at 30 September 2009, BCB had shareholders' funds of approximately $75m, 
equating to an adjusted diluted NAV of  $10.78 per share. Total assets at that 
date were $423.4m, of which 96.5% was in cash, money market funds and term 
deposits.  Liabilities at that date amounted to $348.3m, essentially comprising 
deposits of $145.3m and term loans of $200.3m. 
 
The business plan for the future development of BCB includes strategies to 
address the business model and profitability.  There are significant 
opportunities to expand and build on the service areas, to improve returns on 
shareholders' funds and to expand the business footprint. 
 
Eclectic's investment in BCB 
 
Eclectic has invested in BCB primarily through a Bermuda company, Permanent 
Investments Limited ("Permanent") in which it holds 25.1% of its issued ordinary 
share capital. The investment is a co-investment with Eclectic's investment 
manager, Ingot Capital Management Pty Limited ("Ingot"). 
 
Permanent reached an agreement with the majority shareholder of BCB to acquire 
its entire holding in BCB comprising 3,461,577 ordinary shares, 54.5% of BCB's 
issued share capital, together with 1.2m options for total cash consideration of 
US$38.9m from First Curacao International Bank N.V, 
 
Eclectic invested in secured promissory notes in Permanent, which will be 
satisfied by the transfer to Eclectic of 867,563 shares in BCB representing 
13.7% of the issued share capital.  Eclectic has acquired 75,187 options in BCB 
directly, exercisable at prices between US$5.00 and US$7.05. 
 
Permanent has also agreed to make a tender offer for the balance of the BCB 
issued share capital at the same price, however Eclectic will not be investing 
further in this transaction. 
 
The investment in BCB was made at a price of US$9.88 per share, representing a 
discount to adjusted diluted net assets of 8%. 
 
BCB will be Eclectic's largest holding following this transaction, comprising 
29% of gross assets as at 31 March 2010. 
 
Warren McLeland, a director of Eclectic with substantial banking experience, has 
been appointed to the Boards of both BCB and Permanent. 
 
The Directors consider, having consulted with the Company's Nominated Adviser, 
that the terms of the investment in BCB are fair and reasonable insofar as the 
Company's shareholders are concerned. 
 
Enquiries: 
 
Phoenix Administration Services Limited                           Tel: 01245 
398950 
 
Arbuthnot Securities Limited                                            Tel: 020 
7012 2000 
Alastair Moreton 
Hannah Pearce 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCBGGDSRDBBGGL 
 

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