Snowball boosted by capital injection
Online financial services provider Snowball Group has struck a deal with Fleet Capital with the latter purchasing all its shares and options, resulting in a capital boost for Snowball.
Under the conditions of the deal, which is subject to shareholder approval, Fleet will sell its fund management arm and using the funds raised from the sale purchase all the shares and options in Snowball which currently stand at 27.4 million and 5.2 million respectively.
At the conclusion of the deal Snowball vendors will effectively hold 87 per cent of the issued capital value of Fleet, according to an Australian Stock Exchange (ASX) announcement, resulting in Fleet becoming the holding company for Snowball.
Fleet Capital was established in 1985 and developed to provide corporate advisory and stockbroking activities as well as funds management. However in the last two years it has since closed down the advisory and broking activities.
According to the ASX announcement the sale of the funds management arm will result in Fleet having no operating businesses and divest it of all assests and discharge all liabilities.
The two companies have entered a heads of agreement and the deal is subject to due diligence as well as both groups’ shareholder approval, and is also dependent on the sale of Fleet’s funds management business. Approval for the sale of this business is currently before Fleet’s shareholders.
On completion of the deal, Fleet directors will resign to make way for five new company directors from Snowball. The proposed new directors include one of the group’s founding members and former Sealcorp senior executive Philip Kelly, as chairman.
Plans for the newly structured group also involve the issue of new shares in the company to raise up to $1 million, and a listing on the ASX.
“The company intends to use funds raised by the issue of new shares as additional working capital to complete the implementation of the Snowball business plan,” the ASX announcement says.
The Snowball business plan includes the development of a personal portfolio administration, on-line and telephone assisted financial planning and portfolio design and investment research.
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