TORONTO: GreenBank Capital Inc. has announced the restoration of trading in its shares on the Canadian Securities Exchange, and considerable progress in formulating and implementing its Merchant Banking strategy to reflect the opportunities provided by its investment in Staminier Limited.
On March 11th, 2020 GreenBank acquired a 19% stake in Staminier Ltd. In addition, it received a six-month option to purchase the remaining 81%of Staminier, and at GreenBank’s Annual General Meeting held on April 8th, 2020, an overwhelming 99.9% of the votes cast approved the exercise of this option in the future.
The transaction also provides for a $480,000 CAD funding line from Staminier to GreenBank for working capital purposes which by itself will enable GreenBank to fund ongoing operations well into 2021. It is likely that the Company will, however, in due course need to raise additional debt or equity finance to be able to capitalize on all of its existing or anticipated opportunities.
Staminier Ltd is a UK-based investment company with a portfolio of public and private investments including 3,500 Berkshire Hathaway B shares, EcoSpace 41 (a low-cost housing company), and an option to acquire 13 acres of land adjacent to London’s Gatwick Airport (for which it is intended to apply for planning permission for car parking and logistics development).
Staminier has audited net assets of approximately $3.9 million CAD. Staminier’s strategic focus is across four areas: Property Investment and Planning Gain, Capital Markets, Acquisition of Established Companies Deemed to be Undervalued, and Acquisition of Stakes in Scalable Fast-Growing Companies.
There is a pipeline of potential transactions which Staminier is considering. The company has a strong shareholder base of approximately 150 investors who it is believed will be supportive of the GreenBank strategy going forward including the acquisition of other important investments.
GreenBank’s intends to offer merchant banking services primarily focused on the North American markets. Investment opportunities are originated through a combination of proprietary research, inbound requests from entrepreneurs and referrals from bankers, broker-dealers and other professional networks.
The market for merchant banking services focused on fast growing small to mid-cap companies in North America is fragmented with only a small number of boutique merchant bankers. This market opportunity is significant for a well-structured and well-capitalized merchant bank.
In the past, GreenBank was able to achieve an increasing market value by completing a series of investments that capitalized on this market opportunity, until the untimely death of its founder, Danny Wettreich. Since that time, the existing management team has demonstrated its execution capabilities by rebuilding the data infrastructure of the Company, selling one of its portfolio companies, KYC Technology Inc., which completed a successful public listing on the CSE and now has a market value exceeding $150m CAD, and executing other exits and transactions over the past year.
Together with the Staminier team, GreenBank is now positioned to return to its path of building market cap growth by capitalizing on this merchant banking market opportunity.
The Board believes that the market in Merchant Banking services for fast growth high potential small and mid-cap companies is currently poorly served, and the opportunity for GreenBank Capital to deliver these services is significant. The Board believe that competition is fragmented.
GreenBank and Staminier will take the best of both their merchant banking strategies and implement their merchant banking services in both North America and Europe. The focus will be on investing in undervalued and high growth companies in their respective focus sectors..The Board of Directors of GreenBank Capital is comprised of seven experienced and talented individuals who will lead the Company forward in executing its strategy intelligently, which will provide stability and confidence for the investment community.