Marex Group (MRX) acquired warehousing and logistics firm Edgemere Terminals after the firm lacked funds to comply with the London Metal Exchange's revised capital adequacy rules, Reuters reported Monday, citing sources close to the matter.
The report said that LME increased its capital adequacy requirements for the warehouse companies in its network to at least 5 million British pounds ($6.46 million), up from 1 million pounds. The exchange also raised the minimum level of insurance indemnity needed for warehouses to 1 million pounds from 500,000 pounds previously.
Sources said that Edgemere Terminals did not have the funds to comply with these new requirements and had been looking for a buyer. However, the people said they did not know the exact amount Marex paid for Edgemere Terminals or when the transaction was executed.
Reuters said that LME noted in a September 2024 release that the bankruptcy of a warehouse company in 2016 drove an increase in the revised capital adequacy rules.
Marex Group and Edgemere Terminals didn't immediately respond to a comment request from MT Newswires.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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