Redwood Bank’s parent company, Redwood Financial Partners Ltd (RFPL) has signed Heads of Terms for the reverse takeover of R8 Capital Investments plc (R8), a company listed on the London Stock Exchange.

R8 will acquire the entire issued share capital of RFPL by a share-for-share exchange, giving the shareholders in RFPL a majority holding in R8.

R8 intends to carry out contemporaneous new issue of capital which will be contributed to the Bank as common equity tier 1 regulatory capital.

R8 says this transaction would facilitate a “significant change of pace” for the bank as it aims to increase scale using future capital raises to increase lending capacity, as well as examining the opportunities for diversification into providing finance in adjacent asset classes.

Gary Wilkinson (pictured), co-founder and CEO at Redwood Bank, said: “Today is an exciting day in the bank’s history. Completing this transaction would be a major step forward for us, providing an excellent opportunity for Redwood to raise more capital, grow and diversify.

“I am incredibly proud of what the bank has achieved in the six years since launch and I am confident about the next stage of our journey. We have an enviable network of intermediary partners, a driven team, and robust infrastructure to maximise future opportunities.”

John Stobart, legal counsel at Redwood Bank, added: “While this represents a key opportunity for the bank, it remains subject to, amongst other things, definitive terms being agreed and the completion of legal and financial due diligence and regulatory approvals.”