This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as retained as part of UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 12 July 2023

RBG Holdings plc

("RBG" or the "Group") 

Sale of LionFish Litigation Finance Limited

RBG Holdings plc (AIM: RBGP), the legal and professional services group, is pleased to announce it has completed the disposal of LionFish Litigation Finance Limited ("LionFish") to Blackmead Infrastructure Limited ("Blackmead")¹.

Last year, the Board announced the decision to divest LionFish, a non-core business which finances litigation matters run by third-party solicitors, to reduce the Group's exposure to third-party litigation funding commitments. 

The consideration for the disposal is up to £3.07 million, comprising an immediate payment of £1.07 million to be used for repayment of an intercompany loan, an additional payment of up to £2.0 million, subject to performance conditions to be used to repay additional intercompany debt, and £1 for the entire share capital of LionFish².  The proceeds from the sale will be used for working capital purposes and to reduce net debt of the Group.

The Company's payout under the performance conditions is subject to the successful outcome of cases being acquired by Blackmead. The level of payout is dependent on the return generated by each case and subject to a waterfall whereby Blackmead, as principal risk taker, will be paid a preferential amount upon successful outcome.

As part of the disposal, Blackmead will acquire four of the eight live investments within LionFish with a net asset value of £4.05 million. RBG will be fully discharged from ongoing funding commitments in relation to the disposed investments which are currently estimated to be £2.6 million. The four investments that the Group is retaining are fully funded with an asset value of £2.23 million.  Accordingly, the Group will report a non-cash loss on the disposal of £0.98 million.

Jon Divers, CEO, RBG, said: "Having agreed that LionFish would be better placed in a dedicated asset management business, we are pleased to have completed this disposal.  We have delivered cash back to the Group, reduced our net debt, with the potential to receive additional cash depending on LionFish's future performance. Our focus is now on driving organic growth from our established legal businesses, Rosenblatt and Memery Crystal, and our M&A business, Convex Capital, which has a growing pipeline of potential opportunities."

¹ The ultimate beneficial owner of Blackmead is Averon Park Limited. Foresight Group LLP is the manager of investments made by Averon Park Limited

² In the Company's 2022 Annual Report & Accounts, LionFish was classified as a Discontinued Operation with operating losses (before non-underlying items) of £4.8m (2021: £3.5m operating profit)

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About RBG Holdings plc

RBG Holdings plc is a legal and professional services group, which comprises three core brands:

Rosenblatt

Rosenblatt is one of the UK's pioneering legal practices and a leader in dispute resolution. Rosenblatt provides a range of legal services to its diversified client base, which includes companies, banks, entrepreneurs and individuals. Complementing this is Rosenblatt's increasingly international footprint, advising on complex cross-jurisdictional disputes.

Memery Crystal

Memery Crystal offers legal services in a range of areas such as corporate (including a market-leading corporate finance offering), real estate, commercial, IP & technology (CIPT), banking & finance, tax & wealth structuring and employment. Memery Crystal offers a partner-led service to a broad range of clients, from multinational companies, financial institutions and owner-managed businesses to individual entrepreneurs.

Convex Capital Limited

Convex Capital is a specialist sell-side M&A boutique based in Manchester. Convex Capital is entirely focused on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates. Convex Capital identifies and proactively targets firms that it believes represent attractive acquisition opportunities.

Further information is available at: www.rbgholdings.com.