Update: Strategic investment
GLI Finance (GLI) has altered its proposed measures to strengthen its balance sheet following investor feedback on its original proposals. It has accepted a capital and cash injection from a strategic investor, Somerston Group, and it intends to work closely with the company in the future. GLI will undertake a strategic review of its alternative finance platforms and focus its resources on those it believes will generate incremental shareholder value; this may result in write-downs. The dividend has been halved to 2.5p and the CEO, Geoff Miller, has left the company. Subject to finalising negotiations and GLI shareholder approval, Somerston will provide additional support including a cash injection in return for GLI warrants and a 50% share of GLI’s asset manager. We have adjusted our forecasts for the December 2015 share issue, the cancelled zero issue and the new dividend policy, but not yet for the additional measures proposed and still subject to shareholder approval. The prospective yield for 2016 is 6.8%, slightly lower than the yield on alternative finance loan funds.
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