Proactive Investors - City financier Jonathan Rowland is planning to take Redwood Bank public through a reverse takeover of R8 Capital Investments PLC (LON:MODE), according to Sky News.
The deal is expected to be announced on Monday and aims to secure approximately £20 million in new capital for the group's future growth, the report stated.
R8, previously known as Mode, was initially involved in cryptocurrency ventures before being wound down earlier this year.
The transaction is structured as a share-for-share exchange, which will give investors in Redwood Financial Partners a majority stake in the London-listed company.
Challenger bank Redwood, co-founded by Rowland six years ago, specialises in business lending.
It was the Rowland family's first collaboration with other notable investors, including David Bonderman, co-founder of TPG, one of America's largest buyout firms.
Analysts suggest that the timing of this move is particularly advantageous, given the anticipated wave of consolidation in the UK banking sector.
R8 currently has a market valuation of just over £2 million. The reverse takeover is expected to diversify Redwood Bank into a full-service bank by enabling it to acquire other lenders and loan books.