Manx Financial Group plc (LON:MFX) has extended two unsecured loan agreements totaling £2.0 million for an additional five years to help support the regulatory capital requirements for Conister Bank Limited under Isle of Man banking regulations.
The two loans of £1.0 million from Burnbrae Limited and Culminant Reinsurance Limited respectively were originally issued and announced on 15 October 2020 and have been renewed on arms-length standard commercial terms with an increased annual interest rate of 8%, up from 6%, while all other terms remain unchanged. The loans are unsecured and repayable by the Company at any time during the period.
Both loans are related party transactions as directors Jim Mellon and Denham Eke are connected to Burnbrae Limited, and fellow director Greg Bailey is connected to Culminant Reinsurance Limited. Independent directors, excluding these individuals, negotiated the renewals.
After consulting Manx Financial’s Nominated Adviser, the independent directors, being Douglas Grant, James Smeed, John Spellman and Greg Jones, concluded that the loan terms are fair and reasonable for shareholders, considering the necessity of preserving regulatory capital funding and the practicality and expense of alternative financing options.
