Hancock & Gore Limited (ASX: HNG) has revealed its intention to increase its stake in Mountcastle, a company it already partially owns (49.4%), aiming to become the majority shareholder with an 89.8% ownership stake. Mountcastle specializes in customized uniform manufacturing, distribution, and retail. The agreement is in principle and awaits the finalization of legal contracts, lender approvals, ASX consultations, and other commercial prerequisites. The targeted completion date for this acquisition is November 1, 2023.
To fund the acquisition, Hancock & Gore will utilize various financial tools, including a AU$5.0 million cash payment upon completion, issuing 15 million H&G shares at 35 cents each, transferring H&G's unencumbered equity in Hyde Rd Trust to the Shareholder Partner (with a loan repayment of AU$3.47 million by March 31, 2024, plus interest), and a deferred AU$5.0 million payment one year after completion.
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