Investor has option to increase facility size to C$5 million
By Angela McDaniels
Tacoma, Wash., Sept. 6 - SelectCore Ltd. will receive up to C$5 million of financing from Windsor Bancorp LP through a two-year secured convertible debt facility.
Windsor will advance a minimum of about C$3 million with the option of increasing the amount to C$5 million once the company meets certain financial covenants.
The term of the facility can be extended for two additional one-year terms.
The interest rate is equal to the prime rate charged by the Royal Bank of Canada plus 900 basis points.
Under the terms of the facility, Windsor can convert a portion or the entire principal amount into common shares. The initial C$3 million may be converted into 9,666,666 shares at a conversion price of C$0.30 per share, which is a 46.3% premium over the company's C$0.205 closing share price on Sept. 5.
The maximum amount of the initial advance that is convertible at any given time is C$1.5 million. Additional tranches of C$500,000 can be converted at 30-day intervals.
The conversion price for any advances over and above the initial advance will be determined.
The company has the option to reduce the outstanding principal balance of the loan to C$3 million after five months and C$2 million after 18 months.
Windsor will receive a C$135,500 commitment fee.
SelectCore provides transaction processing and point-of-sale electronic distribution solutions for the prepaid telecom and financial services market. It is based in Toronto.
| Issuer: | SelectCore Ltd.
|
| Issue: | Secured convertible debt facility
|
| Amount: | Up to C$5 million
|
| Term: | Two years with option for two one-year extensions
|
| Coupon: | Royal Bank of Canada's prime rate plus 900 bps
|
| Conversion price: | C$0.30 for initial C$3 million
|
| Warrants: | No
|
| Investor: | Windsor Bancorp LP
|
| Pricing date: | Sept. 6
|
| Stock symbol: | TSX Venture: SCG
|
| Stock price: | C$0.205 at close Sept. 6
|
| Market capitalization: | C$22.56 million
|
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