Former Newcap chairman Harry Steele has bought $25 million in Stingray Digital Group stock, the Montreal-based multi-platform music entertainment company which just acquired Newcap’s radio and television stations for $523 million.

Stingray says it has entered into a subscription agreement with Irving West Limited, a company controlled by Steele, pursuant to which Irving West has agreed to purchase an aggregate of 2,429,544 Subordinate Voting Shares of Stingray at a price of $10.29 per Subordinate Voting Share for total gross proceeds of $25,000,007.76.

“I am honoured by the vote of confidence in Stingray and its business model showed today by the Steele family,” said Eric Boyko, president, co-founder, and CEO of Stingray, said in a release. “By investing in Stingray at a price above market value, the Steele family supports our vision of growth by way of acquisitions and innovative product development. This placement, a testament to their trust in Stingray’s management team, unlocks the potential for continued expansion, more specifically through the digital evolution of our recently acquired radio properties.”

Stingray says the net proceeds of the private placement will be used for working capital, including to provide further flexibility for a future major acquisition by reimbursing certain amounts owing under its credit facilities.

The issuance of the Private Placement Shares is subject to the approval of the TSX and a four-month hold from the date of issuance, which is scheduled to occur on or about Nov. 13.

Steele, a former navy officer of 24 years, founded Newfoundland Capital Corporation in 1972, after taking control of Eastern Provincial Airways in the mid-1970s. Steele served as president of Newcap from its inception until 1993 when he became chairman and CEO. He stepped down as CEO in May 2002 and retired as chairman of the board this past February. He was succeeded by his son Rob Steele.