Callidus Capital Corporation Announces Final Take-Up Under Expired Substantial Issuer Bid, Current Intention to Implement the Previously Announced NCIB, and the Formation of a Special Committee for the Privatization Process

TORONTO, Dec. 29, 2016 /CNW/ - Callidus Capital Corporation (TSX:CBL) ("Callidus" or the "Company") announced today that upon the terms and subject to the conditions of its substantial issuer bid (the "Offer"), Callidus has taken up and accepted for payment an additional 460 common shares (the "Shares") that were validly deposited to the Offer as of December 29, 2016. 

Final Take-Up Under Substantial Issuer Bid

Shareholders had the opportunity to tender Shares until 5:00 p.m. Eastern Time on December 29, 2016, the expiry date of the Offer. Following the take-up of these Shares, the Corporation will have taken up and paid for a total of 2,849,604 Shares under the Offer at $16.50 per Share, or $47,018,466

The Company announced the Offer on March 30, 2016 as the Board believed that the trading price of the Shares did not reflect their underlying value. Since that time the trading price of the Shares has risen from $10.39 per Share to $18.06 per Share as of the close of trading on December 28, 2016.    

Intention to Undertake a Normal Course Issuer Bid

As previously announced, and subject to the trading range of the Shares, Callidus currently intends to submit a notice of intention to undertake a normal course issuer bid ("NCIB") to the Toronto Stock Exchange ("TSX") in connection with the purchase by Callidus of up to approximately 2.5 million of its Shares, representing 5% of the approximately 49.9 million common shares issued and outstanding as of December 29, 2016. This is approximately the same number of shares that remained untendered under the now-expired Offer. The NCIB remains subject to the approval of the TSX and is expected to begin on January 27, 2017, being twenty business days after the expiration of the Offer. A further press release with additional details of the NCIB will be issued upon approval of the bid by the TSX.

Newton Glassman, Executive Chairman and CEO commented, "Over a year ago, we announced and began implementing a multi-stage plan to address a persistent disconnect between our strong operating performance and share price performance – first through the NCIB introduced in 2015, the introduction and multiple increases in the dividend, and the recently completed SIB. While the share price has improved during the execution of the plan, we are implementing a new NCIB because the substantial issuer bid remained unfulfilled, resulting in insufficient leverage and muted ROE as we held cash to support the Offer. We believe the NCIB is a far more efficient use of cash for all continuing shareholders."

The Catalyst Capital Group Inc. ("CCGI"), which manages funds who indirectly hold approximately 67% of the issued and outstanding Shares, has advised the Board that it has no current intention of selling any of the Shares held by it or its funds into the NCIB.

Formation of a Special Committee

The Company also announced that it has formed a special committee of independent members of the Board of Directors of the Company (the "Special Committee") in connection with the previously announced process of soliciting privatization proposals (the "Privatization Process"). The formation of the Special Committee is not in response to any specific proposal received by the Company or an approach by a third party. While the Privatization Process is in a very preliminary stage, the Board unanimously agreed that it was appropriate to establish the Special Committee at this time to avoid any perceived conflict of interest in any development or outcome of the Privatization Process.

Privatization Process Update

The Company also provided an update on the previously announced Privatization Process. The Company has entered into confidentiality agreements and has begun distributing information to a number of interested parties. The Privatization Process remains on track for completion by the end of the second quarter of 2017.

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.

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

For further information: Paula Myson | (416) 945-3226 | pmyson@calliduscapital.ca

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http://www.calliduscapital.ca/

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