City of London Group PLC announced on 19 December 2017, that it was recruiting a team under the leadership of Jason Oakley, to start the process of obtaining a banking licence and creating a business with the purpose of offering a real choice in commercial, SME, bridging and development finance.
COLG is now pleased to announce that it has entered into a formal agreement with the team comprising Jason Oakley, Adrian Golumbina and Bryce Glover.
Under the agreement COLG is acquiring a 73% equity interest in Echo Financial Services Limited, a recently established company with no material assets or liabilities. The remaining 27% equity interest will be held by Jason Oakley, 15%; Adrian Golumbina, 10%; and Bryce Glover, 2%.
COLG will provide total additional funding of up to £2.5m. However, if COLG’s Board determines that the joint venture requires further funding, then COLG and Jason Oakley will provide Shareholder Loans in equal proportions up to an amount of £1.5m (a maximum of £0.75m each).
COLG has put and call option arrangements over the equity interest held by the team. The maximum amount payable by COLG to acquire the equity interest held by the team is £5.4m, which will be satisfied in COLG shares.
The maximum potential commitment is £8.65m, of which £5.4m is to be satisfied in COLG shares and the remainder in cash.
As previously announced, Jason Oakley will subscribe £400,000 for 421,052 new COLG shares and Bryce Glover will subscribe £50,000 for 52,631 new COLG shares at a subscription price of 95p per share. The price per share was calculated when the agreement was announced in December 2017.
Michael Goldstein, CEO of City of London Group said “I am delighted that we now have a top quality delivery team in place, led by Jason Oakley, that is properly motivated and incentivised to build a first class challenger bank offering a real choice in commercial, SME, bridging, and development finance. There is a strong desire to break the banking oligopoly and this is further strengthened by advances in technology, making a “bricks & mortar” network of branches less significant as a barrier to entry. We are all very excited about the prospects of this business.”