David Peters, chief executive of se-cured loans network FT Partnership, has blamed the company’s decision to scrap plans for a reverse takeover of Elephant Loans & Mortgages on market conditions.
A reverse takeover would normally see the acquisition of a public company by a private one.
In such a takeover, the shareholders of a private company buy control of a public shell company, then merge it with the private firm.
The publicly traded corporation is called a shell because all that exists of the original company is its organisational structure.
The private company’s shareholders receive a substantial majority of the shares in the public company and control of its board of directors.
Elephant is listed on the Alternative Investment Market although trading in its shares has been suspended since April, pending the takeover.
In March Elephant subsidiary Elephant Loans Direct became an app-ointed representative of FT Com- pliance Services, a wholly-owned subsidiary of FTP and member of the FTP network.
The original objective of FTP’s takeover plan for Elephant was to gain the status of a listed company, which has advantages when it comes to raising capital.
But Peters says it was not a viable option for FTP to proceed with the re-verse takeover in the current economic climate.
He adds: “Elephant is still a valued member of the FTP network and we have worked with it to reduce costs and ensure it has been able to continue operating.”
Elephant is currently in negotiations regarding another refinancing package. Until such a package is fi-nalised, its shares will remain suspended on AIM.