By Pratima Desai LONDON (Reuters) - Marex Group has bought warehousing and logistics company Edgemere Terminals, which did not have the money to meet the London Metal Exchange's new capital adequacy
Marex Group's Strategic Acquisition of Edgemere Terminals
By Pratima Desai
LONDON (Reuters) - Marex Group has bought warehousing and logistics company Edgemere Terminals, which did not have the money to meet the London Metal Exchange's new capital adequacy rules, three sources with knowledge of the matter said.
The LME late last week sent a notice to its members informing them of a change of address for Edgemere Terminals to 155 Bishopsgate, London, where commodities broker and financial services firm Marex is headquartered.
Edgemere and Marex declined to comment.
Edgemere is approved by the LME, which last year hiked its capital adequacy requirements to a minimum of five million pounds ($6.46 million), from one million pounds previously, for the warehouse companies in its network of 33 locations across the United States, Europe and Asia.
The 148-year-old exchange, owned by Hong Kong Exchanges and Clearing Ltd., also increased the minimum level of insurance indemnity required for warehouses to one million pounds from 500,000 pounds previously.
Edgemere did not have the money to comply with these requirements and had been looking for a buyer since then, the sources said, adding they did not know how much Marex paid for the warehousing firm or when the transaction took place.
In August last year, UK-based Marex's CEO Ian Lowitt told Reuters the U.S.-listed firm was planning acquisitions to diversify the company, after strong results that sent shares to a record high.
Marex bought rival ED&F Man Capital Markets to boost its metals business and expand in fixed income and equities in 2022, in a deal sources said was worth $220 million.
The LME said in a release last September the bankruptcy of a warehouse company in 2016 supported the increases in the minimum capital adequacy requirements and the minimum level of insurance indemnity.
($1 = 0.7744 pounds)
(Reporting by Pratima Desai; editing by Nia Williams)
