Tuesday 24 October 2017

Bermuda firm converts loan, boosting Merrion stake to 22pc

Iceland's Landsbanki.
Iceland's Landsbanki.
John Mulligan

John Mulligan

Bermuda financial services firm Somers is understood to have converted a €2.5m loan note in Dublin-based stockbroking firm Merrion Capital into equity, increasing its stake in the Irish business to just under 22pc.

Somers previously owned just under 6.5pc of Merrion, and had also advanced a €2.5m loan to the brokerage that could be converted into equity.

The Bermudan company noted in its annual report that it now controls 22pc of Merrion, while company filings in Ireland show the €2.5m loan has been converted to equity. Somers acquired its initial stake in Merrion, which also acts as an investment manager, in 2014 for €750,000, and also acquired €2.5m of convertible loan notes issued by Merrion.

The bulk of Merrion had been sold to Iceland's Landsbanki in 2005. By 2008, the Icelandic bank had paid €90m for 86pc of the Irish firm, and was due to acquire the remainder in 2009.

But as Landsbanki collapsed, Merrion management moved to buy back the business. A total of €30m was paid to buy it back, with Merrion management then owning about half the business. New York investment bank Allen & Co remained a strategic investor.

In 2014, Somers and Tetrarch Capital (previously Brehon Capital Partners), took minority stakes. At the end of December 2015, Somers noted that it had a €2.5m, three-year, 3pc convertible loan note with Merrion, which if converted would give the Bermudan group a 21.8pc stake in the Irish financial firm.

Somers noted that Merrion's two main business lines are Merrion Investment Management (MIM), accounting for 24pc of total 2014 revenues; and private clients/stockbroking, which accounted for 33pc of total revenues in 2014.

Irish Independent

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