23 July 2003

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FIMBank in historic takeover of London Forfaiting
leading global forfaiter’s entire share capital valued at GBP30.9 million

By Matthew Vella
Yesterday morning at 0900hrs an announcement was made on both the Malta Stock Exchange and the London Stock Exchange of an offer by FIMBank to purchase the entire issued share capital of London Forfaiting company, the leading global forfaiting company.
The ‘historic’ move, hailed by FIMBank director Francis Vassallo as a “step forward for Maltese banking,” is currently in the process of seeking 90 per cent approval by LFC’s shareholders to purchase the GBP30.9 million share capital at a premium of 119 per cent over a closing price of 13.5 pence per share on 27 September 2002. FIMBank currently has 60 per cent approval from LFC shareholders .
But LFC’s board of directors’ unanimous go-ahead for the takeover has spelt a major move ahead for FIMBank, the Kuwaiti-owned boutique trade finance bank based in Malta. The company had long been edging into the speciality niche of forfaiting especially when FIMBank took on Margrith Lütschg-Emmenger, who joined them from WestLB in London as executive Vice-President. Vassallo said the acquisition of LFC will enable the fulfilment of this direction and also embellish the company’s portfolio and stature.
Searing off all competitive bids, FIMBank’s takeover of LFC will signal a considerable growth in size and scope for the company, and has not ruled out streamlining plans for London Forfaiting which is currently operating under a heavy cost-base. Once the offer is accepted and unconditional in all respects, FIMBank will seek a delisting of LFC from the London Stock Exchange.
The offer will be financed by a combination of FIMBank’s own resources and a short-term bridging loan from Bank of America, which will then be repaid from LFC’s cash resources.
LFC is a world-renowned player in forfaiting, the purchase and sale of trade-related receivables on a non-recourse basis. It will continue to offer forfaiting services as the trading arm of FIMbank, which Francis Vassallo said would be "benefiting from LFC’s brand name, network and experience in this specialised niche market. This is a giant step forward for FIMBank, now becoming a stronger player in the global market of trade finance services."
Following yesterday’s announcement, FIMBank expects to post a detailed offer document to shareholders of LFC as soon as possible. The bank has noted that it has the right to lower the shareholders’ approval threshold to just over 50 per cent from the current 90 per cent, with the consent of the provider of the bridging finance.
FIMBank will also be inviting its shareholders to the Malta Stock Exchange on Monday, 28 July 2003 for an information presentation and briefing on the friendly takeover and keep shareholders informed of all developments in connection with the offer.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
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