TORONTO, Dec. 22, 2017 /CNW/ - Dealnet Capital Corp. ("Dealnet" or the "Company") (DLS:TSXV) announced today that it has closed its recently announced $12 million offering of 6% non-convertible senior secured debentures.
Funds managed by Stornoway Portfolio Management Inc. ("Stornoway"), a Toronto-based asset management firm purchased $7 million (face value) as Lead Investor in the offering. Directors, managers and employees of the Company purchased approximately $3.7 million of the offering's face value. Paradigm Capital acted as an advisor to the Company in connection with the offering.
"The support that this debenture offering received amongst both institutional investors and insiders is a clear vote of confidence in Dealnet's ability to become a leading specialty consumer finance company in Canada," said Dr. Steven Small, Dealnet's Executive Chairman.
"In the past two months we have taken decisive steps to reduce our operating costs, accelerate our dealer onboarding process, diversify and expand our funding relationships and significantly lower our cost of capital," said Brent Houlden, Dealnet's Interim CEO. "Closing this financing transaction adds further flexibility and capacity to our capital structure to achieve our 2018 growth and profitability objectives," added Mr. Houlden.
Proceeds from the offering will be used to fund the Company's 2018 growth oriented business plan, to repay the Company's $2.5 million convertible debenture owing to Chesswood Group due in February 2018 and for general corporate and working capital purposes.
The participation of directors and officers of the Company in the offering constitute a related party transaction pursuant to Multilateral Instrument 61-101 ("MI 61-101"). This participation is exempt from the valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in that the fair market value of the consideration for the securities of the Company issued to insiders does not exceed 25% of its market capitalization. Directors and Officers of the Company purchased $3,253,000 of the total offering.
About Dealnet Capital Corp.
Dealnet is a specialty finance company servicing the $20 billion home improvement finance market through both dealer-based and direct homeowner-based originations of secured finance assets (equipment leases and loans). The company earns net finance income over the term of these assets and from fee income derived from the transaction support services that it provides to its dealer network. The Company also uses its engagement platform to provide customer support services on a contract basis to third-party institutions.
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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management at the date the information is provided, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change, unless required by law. The reader is cautioned not to place undue reliance on forward-looking information.
SOURCE Dealnet Capital Corp.
For further information: Brent Houlden, Chief Executive Officer, (905) 695-8557 ext.1145, firstname.lastname@example.org; John Sadler, Senior Director - Corporate Communications, (905) 695-8557 ext. 1348, email@example.com
Dealnet is a specialty finance company servicing the $20 billion home improvement finance market through both dealer-based and direct homeowner-based originations of secured finance assets (equipment leases and loans). The company earns net finance income over the term of these assets and from fee income derived from the transaction support services that it provides to its dealer network. The...