TORONTO, Oct. 31, 2016 /CNW/ - Callidus Capital
Corporation (TSX:CBL) ("Callidus" or the "Company") today provided
an update on three significant and independent developments in its
ongoing capital markets program – the selection of Goldman, Sachs
& Co. ("Goldman Sachs") as Financial Advisor to lead the
previously announced privatization process for the Company, the
extension of the expiry and increase in the size of the outstanding
substantial issuer bid, and the expected closing date of its
securitization program.
Goldman Sachs Appointed Financial Advisor to Lead
Privatization Process
The Company announced Goldman Sachs has been engaged to act as
financial advisor in connection with the previously announced
privatization process. The process is now underway and
is expected to be completed before the end of the second quarter of
2017. Material updates to the process will be provided as
they occur.
Extension of Expiry and Increase in the Size of the
Outstanding Substantial Issuer Bid
The Company also announced that it is increasing the number of
shares eligible under its current substantial issuer bid (the
"Offer") by 1,500,000 shares, or approximately an additional 3% of
the shares outstanding shares as at October
27, 2016. Under the revised Offer, Callidus has
offered to purchase for cancellation up to 5,071,428 of its
outstanding common shares (the "Shares") at $16.50 per share, from its shareholders. Under
the revised Offer, the aggregate maximum purchase price payable by
Callidus is Cdn $83,678,562.
The Company's Board of Directors has received an opinion (the
"Liquidity Opinion") from National Bank Financial to the effect
that, based on and subject to the assumptions and limitations set
out therein, there was a liquid market for the shares as of
October 31, 2016. The Liquidity
Opinion also states that it is reasonable for the Board to conclude
that, following the completion of the Offer in accordance with its
revised terms, there will be a market for holders of the shares who
do not tender to the Offer that is not materially less liquid than
the market that existed at the time of the making of the revised
Offer.
The Offer is currently scheduled to expire at 5:00 p.m. (Toronto time) on October 31, 2016. Callidus is extending the
Offer to 5:00 p.m. (Toronto time) on November 30, 2016, as may be further extended or
withdrawn by the Corporation. As at October
28, 2016, the Company had taken up and paid for 2,683,100
shares under the Offer.
Callidus will mail a notice of variation and extension to its
shareholders, setting out the revised number of eligible shares and
the new expiry date of the Offer. This press release is for
information purposes only and is not an offer to buy or the
solicitation of an offer to sell any Shares.
Securitization Program Expected to Close On or Before
November 15, 2016
As previously announced, the Company has received provisional
investment grade ratings for loans to be issued through a new
securitization program. The securitization, with four
investment grade debt tranches ranging from AAA (sf) to BBB (sf),
will be initiated at $165 million and
is expected to close on or before November
15, 2016. The four investment grade debt tranches
ranging from AAA (sf) to BBB (sf), represent approximately
two-thirds of the initial expected issue size.
The initial $165 million
securitization will allow the Company to lever the current loan
portfolio by an incremental $25
million. Callidus has re-started growth of its loan
portfolio and will utilize the facility as the primary source of
funding for incremental growth. The Corporation remains
committed to doubling the loan portfolio over the next two to three
years.
Debt with ratings and maturity similar to the new securitization
facility is currently trading in a range that would represent at
least a 2% reduction in Callidus' cost of funds, compared with the
rates Callidus is paying under the current financing facilities
further reducing the Company's cost of capital.
Forward-Looking Statements
This press release contains forward-looking statements such as
those related to the expected completion of the privatization
process and an initial $165 million
securitization. Such forward-looking statements involve a number of
risks and uncertainties. Although Callidus believes these
statements to be reasonable, the assumptions upon which they are
based, including the stability of capital market conditions, may
prove to be incorrect. Furthermore, the forward-looking statements
contained in this press release 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.
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 borrower'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. Further information is
available on our website, www.calliduscapital.ca.
SOURCE Callidus Capital Corporation