Fanning had agreed to buy 98mln shares from the fund manager in May at 21p, but San Leon said today that due to movements in financial markets since then he has been unable to raise the money required.
San Leon said Toscafund has been supportive of the efforts Fanning has gone to in endeavouring to settle the purchase consideration but now both parties have decided the prudent course of action is to recognise that the deal will not go ahead.
In a statement, San Leon added that Toscafund had confirmed that it understands the non-completion reflected circumstances not apparent at the time of the trade.
The fund manager has also further reaffirmed its support of the board of San Leon and the company’s strategy to invest in strategic assets whilst maintaining a financially strong position.
Fanning owns 9.5mln shares or 2.1% of San Leon’s shares while Toscafund has 330.5mln and a 73.5% stake.
San Leon shares rose 3.6% to 22.8p.