GAM board labels proposed rival loan 'insufficient' for stabilisation
GAM’s board argued that the level of funding needed to stabilise the firm was “significantly higher”, and likely to be in excess of CHF 100m (£89.1m).
Last week (17 August), Rock wrote to GAM to propose short-term bridge financing should be made available if the Liontrust offer fails.
Rock's offer was made in response to a loan provided by Liontrust to GAM as part of the former's takeover deal, which GAM has argued was essential for the survival of its business, and Rock had previously suggested was a conflict of interest.
The firm is part of NJJ Holding, which oversees NewGAMe, a GAM shareholder group which has repeatedly objected to the proposed Liontrust takeover offer.
GAM shareholders offer new loan facility to replace Liontrust offer
The plan from Rock would involve a CHF 25m (£22.3m) convertible bond to GAM, which Rock would propose at an extraordinary general meeting to be held in the future, exceeding Liontrust's CHF 20m (£17.8m) loan facility.
However, in a letter today (21 August), GAM's board argued that the level of funding needed to stabilise the firm was «significantly higher», and likely to be in excess of CHF 100m (£89.1m).
GAM explained that the first tranche of this loan was now fully drawn to fund its losses and UK pension payments over the last two months, which totalled CHF 10m (£8.9m).
GAM labels NewGAMe's proposal withdrawal 'vexatious' and a disruption strategy
The remaining CHF 15m (£13.4m) from Rock's loan once Liontrust had been repaid would be «insufficient», it argued, as the firm lost CHF 23.5m (£20.1m) in the first half of 2023, while CHF 10m must be paid annually to the GAM UK pension scheme.
Furthermore, the firm's balance sheet contained over CHF 40m (£35.7m) in lease liabilities,
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