Merlin International, the Isle of Man-based developer whose shares were suspended last year, reduced its pretax loss for the six months to December to £2.74m (£7.12m). The directors now say that the company is trading profitably; a financial reconstruction involving a share swap and issue of new shares is expected to raise up to £9.6m from shareholders.
A new UK holding company, Merlin International Holdings, will exchange its shares for existing Merlin International Properties shares. At the same time MIH will pay about £7m for the Manchester and Exchange House properties, currently owned by an MIP subsidiary. Completion of the transactions will, the directors say, result in a secure listed company with nil borrowings and rental income of £1m pa.
Merlin is currently in dispute with Central Manchester Development Corporation over a compulsory purchase order made on the Manchester property. CMDO is alleging failure to commence work on site, but Merlin says that the scheme has been blighted by a new railway line and is claiming £2m in compensation while seeking the quashing of the CPO.
