TORONTO, Dec. 23, 2014 /CNW/ - Callidus Capital
Corporation ("Callidus" or the "Company") (TSX: CBL)
today provided an update on the following.
Finalization of Terms of Bridge Facility
Callidus announced the finalization of the terms of the
previously announced USD $200 million
unsecured subordinated bridge facility extended by funds managed by
The Catalyst Capital Group Inc. (the "Catalyst Funds"). As
previously disclosed, the terms of that facility were subject to
the approval of the independent directors of the Company. The
independent directors have agreed with the Catalyst Funds that the
facility will carry an interest rate of 8% per annum. In
addition, the Catalyst Funds will be entitled to an annual fee
equal to 1.5% of the maximum amount available under the facility
and a standby fee equal to 1% per annum of undrawn amounts.
The bridge facility will have a term of 29 months and will be
pre-payable by Callidus at any time without penalty. The
facility will be unsecured and will be subordinated to the
Company's other debt facilities. Approximately US$75 million had been drawn under the facility
as of December 19, 2014.
In accordance with the Company's policy, the independent
directors have reviewed the terms of the bridge facility and
concluded that they are consistent with the terms applicable
between arm's length parties for similar unsecured, subordinated
credit facilities
Purchase of Participation Interest
Callidus also announced that it intends to purchase the
$50 million participation of Catalyst
Fund Limited Partnership IV in Callidus' loan portfolio for a
purchase price of $50 million, being
the book value of the participation interest. In connection
with the acquisition, Catalyst Fund Limited Partnership IV has
agreed to provide a principal guarantee related to the sale of the
participation interest as disclosed in the prospectus filed in
connection with the Company's initial public offering.
Also as disclosed in the prospectus, the Catalyst Funds provided a
principal guarantee with respect to the loans in existence at that
time and have agreed to provide a similar guarantee in connection
with any future sales of participation interests to Callidus in
accordance with the participation agreement between the
companies.
Callidus has determined to exercise its right to acquire the
participation interest. The acquisition will result in
approximately $81 million of loans
that are currently derecognized coming on to Callidus' balance
sheet and management has determined that the acquisition of the
participation interest will be accretive to earnings per share.
Further, management has determined that acquiring the participation
interest is the most cost effective way to increase the size of the
loan portfolio as well as the lowest risk option given the
principal guarantee from the Catalyst Funds and Callidus'
involvement in originating the loans.
The purchase price will be satisfied by Callidus issuing
2,335,357 common shares to Catalyst Fund Limited Partnership IV at
an issue price of $21.41 per common
share, being the closing price of the Company's common shares on
the Toronto Stock Exchange on December 3,
2014, the last trading day before the date on which it was
first announced that the Catalyst Funds had offered to sell the
participation interest to Callidus for shares. This price
represents a premium of in excess of 27% over the closing price of
the Company's common shares on the Toronto Stock Exchange on
Friday, December 19, 2014.
The transaction is subject to receipt of all required regulatory
approvals.
The Catalyst Funds are "related parties" of the Company for the
purposes of applicable securities laws as they beneficially own,
control or direct approximately 57.5% of the Company's issued and
outstanding common shares and approximately 56.5% of the common
shares on a fully diluted basis. Following completion of the
acquisition of the participation interest, the Catalyst Funds will
beneficially own, control or direct approximately 59.5% of the
Company's issued and outstanding common shares and approximately
58.4% of the common shares on a fully diluted basis.
Also in accordance with the Company's policy, the independent
directors of Callidus have approved the issuance of shares by the
Company as consideration for the acquisition of the participation
interest and the price at which the common shares will be issued to
Catalyst Fund Limited Partnership IV.
About Callidus Capital Corporation
Established in 2003, Callidus Capital Corporation is a Canadian
company that specializes in innovative and creative financing
solutions for companies that are unable to obtain adequate
financing from conventional lending institutions. Unlike
conventional lending institutions who demand a long list of
covenants and make credit decisions based on cash flow and
projections, Callidus credit facilities have few, if any, covenants
and are based on the value of the company's assets, its enterprise
value and borrowing needs. Callidus employs a proprietary system of
monitoring collateral and exercising control over the cash inflow
and outflows of each borrower, enabling Callidus to very
effectively manage any risk of loss.
Forward Looking Statements
Certain statements made herein contain forward-looking
information. Forward-looking statements in this release include
those related to expected growth in the loan portfolio, repayment
of the bridge loan and sufficiency of sources of
liquidity. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors and
assumptions that may cause the actual results, performance or
achievements of Callidus, or developments in Callidus' business or
industry, to differ materially from the anticipated results,
performance or achievements or developments expressed or implied by
such forward-looking statements. Such factors and assumptions
include, but are not limited to, Callidus' inability to
successfully originate new loans due to competitive factors or
adverse developments in the asset-based loans market; the
availability of additional financing on acceptable terms, or at
all, being dependent on capital market conditions and the operating
performance of Callidus; the continued availability of funding
under bridge loan facility provided by Catalyst Funds and Callidus'
existing loan facilities; and other factors and assumptions
discussed in the section entitled "Risk Factors" in documents filed
with the Ontario Securities Commission and other securities
commissions across Canada,
including Callidus' prospectus dated April
15, 2014. If any such risks actually occur or assumptions
prove to be incorrect, Callidus' business, financial condition or
results of operations could be materially adversely affected.
Readers are cautioned not to place undue reliance upon any such
forward-looking statements, which are made as at the date of this
press release and Callidus does not undertake any obligation to
update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws.
SOURCE Callidus Capital Corporation