EDINBURGH-founded merchant bank Quayle Munro (QM) has completed the sale of its Scottish corporate advisory business to four directors for a token £1.
QM retains a 30% stake in Quayle Munro Project Finance, and said it was confident about the Scottish arm's prospects, despite unveiling a £440,000 loss for the operation last year. "We are very confident with the arrangement we have made with the senior people in Scotland to buy the business and refocus it," said chairman Andrew Tuckey.
He was reporting on a year which saw QM slide from a pre-tax profit of £937,000, and £10.9m two years ago, to a loss of £8.1m after exceptionals, including the Edinburgh trading loss and £1.37m of reorganisation and redundancy costs.
Mr Tuckey added: "We have a continuing interest in the business that will now operate with a much lower cost base and all the incentives of equity ownership. We think they will thrive."
In exchange for its stake, QM will provide £375,000 in working capital and a £375,000 loan to the new offshoot.
The Scottish buy-out will have the right to repurchase up to 100% of the QM stake from January 1 next year subject to the business delivering a minimum 20% return on capital. The four-man team excludes former Edinburgh managing director Rob Cormie, who resigned in July to set up his own consultancy, Edinburgh Advisers, specialising in the renewable energy field. However, the focus of Quayle Munro Project Finance does include the renewables sector, as well as education and infrastructure, according to yesterday's statement.
Quayle Munro's revenue last year was more than halved to £5.3m, largely due to project timings, said Mr Tuckey.
The group has been winding down its portfolio of unlisted investments, which has in the past included Scottish companies.
Andrew Adams, QM's chief executive, said: "Quayle Munro will now focus its efforts on continuing to develop the London-based corporate finance business."
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