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SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
TORONTO, June 29, 2017 /CNW/ - Callidus Capital
Corporation (the "Company" or "Callidus") today provided an update
on the current status of its business and ongoing privatization
process.
Privatization Process
Consistent with previous disclosure, the Company is continuing
the process of soliciting proposals intended to lead to the
privatization of Callidus. The complexity and diversity of
the structures that have been proposed, has unfortunately resulted
in the process taking longer than originally expected. As
part of the formal privatization process, and as an alternative to
proposals received, the Company has retained the services of a
placement agent and advisory firm with experienced personnel
dedicated to raising capital for alternative investments, including
"private debt funds". The potential pursuit of a "private
debt fund" as a competitor in the privatization process is
specifically being explored because it may result in greater value
to the Company's public shareholders than the proposals otherwise
available to the Company. Should it be determined that the
"private debt fund" is the preferred privatization
alternative, Catalyst Capital Group Inc. ("CCGI")
has advised that funds it manages would most likely
participate and would do so on the same economic terms as the
public shareholders. There can be no certainty regarding
whether such a private debt fund transaction will be effected, its
timing or the amounts that may be raised, if any. No proposal
for any "private debt fund" has been received nor has this
alternative been reviewed by the Special Committee of the Board of
Directors established in connection with the privatization
process.
As is typical of any process prior to final and definitive
agreement, there can be no certainty that a transaction will be
concluded or as to what price may be offered or accepted.
CCGI, which manages funds that own approximately 68% of the issued
and outstanding shares of Callidus, remains committed to completing
a transaction on terms consistent with the previously published
valuation range of $18 to $22 per
share.
Loan Portfolio
As of June 27, 2017, the Company's
gross loans receivable, were approximately $1.03 billion. Over the past two quarters,
Callidus has been focused on restarting growth in its loan
portfolio. Callidus is actively pursuing up to $1.3 billion of potential loans ("the pipeline"),
presented on a basis consistent with past reporting
parameters. On June 28, 2017,
Callidus closed and funded a new loan representing approximately
$30 million (US$22.8 million) of facilities. In
addition, the Company has approximately $330
million (US$255 million) of
term sheets signed back by prospective borrowers (which is included
in the estimated pipeline number). If the due diligence being
undertaken by the Company in relation to the prospective borrowers
is satisfactory, the term sheets are expected to convert into new
loan facilities within the next three to four weeks. As
previously disclosed, Callidus undertakes extensive due diligence
before closing on a loan transaction and has historically closed on
between 60% and 80% of signed back term sheets. There can be
no assurance that the results of the due diligence related to these
signed back term sheets will be satisfactory to Callidus.
Strengthening the Senior Management Team
As previously announced, it has been and remains Callidus'
intent to further build the senior team to support and drive
portfolio growth and quality. To that end, the Company has
recruited two senior, experienced executives who have agreed to
join the organization in the next two months. This includes an
originator with extensive experience in mid-market centres in the
western U.S. and an underwriter with considerable experience in
leading the asset based lending and restructuring divisions of
several large banks.
Normal Course Issuer Bid
In January 2017, Callidus
commenced a normal course issuer bid ("NCIB") with respect to the
common shares (see news release dated January 25, 2017). As at June 27, 2017, the Company had repurchased
727,088 common shares under the NCIB at a weighted average price of
$15.8907 per common share. The
Company intends to continue purchases under the NCIB as long as the
common shares of the Company continue to trade at a discount to the
Company's view of fair value.
Forward-Looking Statements
Certain statements made herein contain forward-looking
information. Although Callidus believes these statements to
be reasonable, the assumptions upon which they are based 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 inflows
and outflows of each borrower, enabling Callidus to very
effectively manage risk of loss. Further information is available
on our website, www.calliduscapital.ca.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any securities of the Company or in
any investment fund to be managed by the Company. Any such
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended or any U.S.
state securities law and may not be offered or sold in the
United States except in compliance with the registration
requirements of said Act and applicable U.S. state securities laws
or pursuant to an exemption therefrom.
SOURCE Callidus Capital Corporation