Flow Capital Announces Non-Convertible Debenture Transaction
02 Août 2023 - 11:46PM
Flow Capital Corp. (
TSXV:FW) (“
Flow
Capital” or the “
Company”), a leading
provider of flexible growth capital and alternative debt solutions,
announces that it has entered into a loan transaction with certain
third party lenders pursuant to which the lenders will advance the
aggregate amount of C$17.9 million to the Company (the "Loans").
The Loans will be evidenced by unsecured, non-convertible
debentures (the "Debentures") issued by the Company to the Lenders
pursuant to the terms of a debenture indenture entered into between
the Company and Olympia Trust Company, as debenture trustee.
The Debentures will be issued in multiple series
bearing interest at varying floating rates, with a minimum rate of
7% and a maximum rate of 12.5% based on the applicable series of
Debentures, and will mature on August 1, 2043 (the “Maturity
Date”), subject to earlier redemption or retraction in certain
circumstances. The Debentures are unsecured, non-convertible,
non-voting and carry no right to participate in the earnings of the
Company. No portion of the principal or interest outstanding under
the Debentures may be repaid in securities of the Company.
The net proceeds of the Loans will be used by
the Company to repay existing indebtedness, fund investments and
for general corporate purposes.
"We are excited about the introduction of the
new redeemable debenture structure. By providing investors with a
floating rate of interest, redeemability, and seniority to almost
$40M in equity, we expect we can use it to raise additional capital
over time. The net new funds will be invested into high growth
companies in the form of senior secured loans, with warrant upside.
Given our 5 year track record of over 30% IRR on our investments,
we expect the deployment of funds into new investments will help us
to continue to increase shareholder value," said Alex Baluta, CEO
of Flow Capital.
Certain officers and directors of the Company
participated in the Transaction and, as such, the Transaction may
constitute a related party transaction under Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions (“MI 61-101”), but is otherwise exempt from
the formal valuation and minority approval requirements of MI
61-101 by virtue of Sections 5.5(b) and 5.7(1)(f) of MI 61-101. No
special committee was established in connection with the
Transaction or the participation of the applicable officers and
directors in the Transaction, and no materially contrary view or
abstention was expressed or made by any director of the Company in
relation thereto. Further details will be included in a material
change report that will be filed by the Company in connection with
the completion of the Transaction. The Company did not file the
material change report more than 21 days before the expected
closing date of the Transaction as the details of the Transaction
and the total amount to be advanced by the applicable officers and
directors were not settled until shortly prior to the closing of
the Transaction, and the Company wished to complete the Transaction
on an expedited basis for sound business reasons.
About
Flow Capital
Flow Capital Corp. is a diversified alternative
asset investor and advisor, specializing in providing minimally
dilutive capital to emerging growth businesses. For more
information on Flow Capital, please visit
www.flowcap.com.
For further information, please contact:
Flow Capital Corp.Alex BalutaChief Executive
Officeralex@flowcap.com
1 Adelaide Street East, Suite 3002,PO Box 171,Toronto, Ontario
M5C 2V9
Forward-Looking Information and
Statements
This press release contains certain
“forward-looking information” or "forward looking statements"
within the meaning of applicable securities legislation. Such
forward-looking information and forward-looking statements are not
representative of historical facts or information or current
condition, but instead represent only the Company’s beliefs
regarding future events, plans or objectives, many of which, by
their nature, are inherently uncertain and outside of the Company’s
control. Generally, such forward-looking information or
forward-looking statements can be identified by the use of
forward-looking terminology such as “plans”, “expects” or “does not
expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or variations of such words and phrases or may contain
statements that certain actions, events or results “may”, “could”,
“would”, “might” or “will be taken”, “will continue”, “will occur”
or “will be achieved”. The forward-looking information contained
herein includes information relating to the terms of the
Debentures, the proposed use of proceeds of the Loan and the
potential for issuing additional Debentures.
The forward-looking information and
forward-looking statements contained in this press release are made
as of the date of this press release. All subsequent written and
oral forward- looking information and statements attributable to
the Company or persons acting on its behalf is expressly qualified
in its entirety by this notice. Readers should not place undue
reliance on forward-looking information contained in this press
release.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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