UPDATE 1-UK's Tungsten plans IPO to create supply chain business
LONDON, Sept 4 (Reuters) - Tungsten Corporation Plc said on Wednesday it aimed to raise 160 million pounds ($248.51 million) on London's AIM junior stock market to build a business that finances the invoices of companies so they have more funds to invest.
Investment vehicle Tungsten, founded by brothers Edmund and Danny Truell and whose directors include ICAP Chief Executive Michael Spencer, plans to use the IPO funds to buy OB10, an electronic invoicing business connecting buyers like Apple, Tesco, BP Plc and GlaxoSmithKline with their suppliers.
Tungsten will also buy the UK arm of First International Bank of Israel (FIBI) following the listing. The bank will then be combined with OB10 and act as an intermediary between buyers and their suppliers, paying invoices on request rather than after the standard 60-day wait period.
The FIBI acquisition will be subject to Bank of England Approval. FIBI could not be reached for comment.
Leftover funds from the IPO will provide working capital for the new specialist lender and support an invoice analytics business.
"This is good news in terms of coming up with a very disruptive and innovative way of financing small suppliers. We think it will transform the way that supply chain works," said Edmund Truell.
Invoice financing - advancing funds to firms by buying their outstanding sales invoices - is attracting investors looking for big returns amid flat interest rates and rocky markets. A host of new websites provide online platforms for investors to step into a gap left by banks that have been forced to cut risky lending by regulators.
Truell, who also founded private equity firm Duke Street Capital, said investors were enthusiastic about the IPO, which is likely to take place in early October.
Canaccord Genuity is acting as financial adviser and broker to Tungsten and will be the sole book runner. Charles Stanley Securities will act as its nominated adviser.