- Hong Kong insolvency manager Credit Intelligence (CI1) has secured a $5 million equity funding facility with LS Whitehall Group (LSW)
- The money can be raised in five separate tranches of up to $1 million each
- Shares placed to LSW will be issued at the five-day volume weighted average price (VWAP) of the shares immediately prior to subscription
- The parties have also made arrangements for potential additional, non-dilutive funding in connection with each placement through an equity participation arrangement
- Credit Intelligence now has the ability to continue with the development of its Hong Kong core insolvency business and Singapore credit services operations, while also looking for further acquisition and investment targets
- Credit Intelligence closed Friday’s session 12.5 per cent red, with shares priced at 2.8 cents each
Debt restructuring and insolvency management company Credit Intelligence (CI1) has secured a $5 million equity funding facility with LS Whitehall Group (LSW).
The deal
Under the terms of the deal, CI1 can raise up to $5 million over 12 months through five placement tranches of up to $1 million.
The shares placed to LSW will be issued at a subscription price equal to the average of the five-day volume weighted average price (VWAP) of the shares immediately prior to subscription.
After the first $1 million tranche, each tranche of between $400,000 and $1 million can be accessed entirely at the company’s discretion.
A six per cent administration fee will apply to each transaction.
The parties have also made arrangements for additional, non-dilutive funding in connection with each placement through an equity participation arrangement.
This will essentially operate as a funding bonus structure – or fee structure – based on the performance of CI1 shares.
The benchmark price for the arrangement will be at a 15 per cent premium to the subscription price of each tranche – the five-day VWAP at the time of the placement.
Should CI1 shares outperform the benchmark price, the difference will be paid to the company as bonus funding. Should the shares fall short, the shortfall will be issued as a fee.
The arrangement will be settled quarterly.
Moving forward
The money raised will allow Credit Intelligence certainty and security in funding its
Singapore subsidiaries and future acquisition activities.
The LSW deal doesn’t preclude CI1 from pursuing other traditional methods of fund raising or financing.
Credit Intelligence now has the ability to continue with the development of its Hong Kong core insolvency business and Singapore credit services operations, while also looking for further acquisition and investment targets.
Credit Intelligence Chairman Jimmie Wong says it’s a great outcome for the company.
“[The deal] provides CI1 the security and ability to continue with the rapid development of our Hong Kong business and Singapore operations,” he stated.
“CI1 is very pleased to be working closely with LSW, and with their strong support, we are able to move closer to becoming one of the market leaders in the credit services and insolvency sectors.”
Credit Intelligence Chairman Jimmie Wong
All in all, a handy arrangement which offers considerable security, even amid the uncertainties around the global COVID-19 situation.
Credit Intelligence closed Friday’s session 12.5 per cent red, with shares priced at 2.8 cents each.