When AIM-listed housebuilder Telford announced yesterday it had paid £6.3m for fit-out contractor Clifford Contracting, the news must have caused a few people to do a double-take at their computer screens.
In a City statement, the east London developer talked a lot about loan notes, call option agreements and aggregate considerations.
Behind the jargon, what it's actually done is raise £6.3m in a hurry.
Telford wanted the £6.3m Clifford had sitting in its bank account so it paid £6.3m to buy the company in the form of loan notes and new shares.
Net result: it raises £6.3m and has a few years to pay the money back at more favourable rates than the bank would offer. A sort of back-door rights issue without the big share dilution.
As the company's straight-talking chief exec Andrew Wiseman says: "It's quite an innovative way of doing things and it's a show of strength for our banks."
The reason it needs the money is easy to guess. Wiseman has said there may be a £12m funding hole as buyers pull out of completions this year. Of the 600 units the company hoped to sell before the end of this year, he expects 10% to fall through as mortgage funding dries up. At about £200,000 a pop, that adds up to £12m.
Wiseman says the £6.3m will be enough to tide it over if the market doesn't lurch further downwards but says plans are in place with its banks should it need more.
The company has until June 2014 to pay the money back, by which time it is banking on a recovery. The interest rate climbs from 4.5% to 8.9% in October but Telford was vague about what the rate was beyond September 2010.
Wiseman admitted: "Yes it does go up steeply after that but we hope to have paid it back by then."
Nothing like gentle understatement, is there?