Dealnet Announces Closing of Debenture Offering of Up to $100 Million
TORONTO, ONTARIO–(Marketwired – Jan. 13, 2016) – Further to its press release of December 21, 2015, Dealnet Capital Corp. (“Dealnet” or the “Company”) (TSX VENTURE:DLS) is pleased to announce that its wholly owned subsidiary, One Dealer Inc., has closed a secured debenture offering and issued an initial $10 million debenture (the “Debenture”) with capacity to issue up to $100 million under the established structure.
The versatile structure of the financing allows for the warehousing before securitization as well as term funding of consumer finance contracts with terms of up to ten years. The transaction structure supports the Company’s expansion plans to capture a wide variety of consumer finance products at point of sale including home improvement, health care and retail financial solutions.
The Debenture has a term of ten years and carries a fixed interest rate of 5.99{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}. The rate applicable to future issuances will be fixed at the time of draw at the 10 year Government of Canada Benchmark Bond yield plus an appropriate margin. As part of the transaction, the Company repaid its existing $3 million debenture to the same subscriber instead of amending the instrument as previously announced (for net cash proceeds from the offering of $7 million to the Company). Future debenture issuances are at the discretion of the subscriber.
As a part of the offering, the Company issued 2,000,000 common share purchase warrants (the “Warrants”) to the subscriber. The Warrants have an exercise price of $0.67, expire on January 12, 2019 and are subject to a four month hold period until May 13, 2016. The issuance of the Warrants is subject to final acceptance by the TSX Venture Exchange.
“We have built an exceptional relationship with IA Clarington Investments, the subscriber, and we are now being rewarded for our proven execution and risk management methodologies,” stated Mike Hilmer, CEO of Dealnet. “On full draw, the debentures would support approximately 20,000 additional funded loans or leases in our home improvement vertical. The Debenture structure also co-exists well with additional underwriting facilities expected to be announced this year, which together expand our treasury capability to support significant growth within our financial services division. Our expanded capacity and flexibility supports our drive to be the emerging growth leader in the non-bank lending space.”
Forward Looking Statement
This news release contains certain “forward-looking information” within the meaning of applicable securities law including statements regarding the Company and the Debenture, its expected terms and closing date. 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.
About Dealnet Capital Corp.
Dealnet is an engagement enabled consumer finance company that is initially focused on home improvement finance solutions including heating ventilation and air conditioning financing and leasing. Dealnet leverages its large scale customer service and engagement technology platform to attract home improvement dealers by providing front and back office services to them resulting in dealer origination growth.
For additional information please visit www.sedar.com.
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.
- Published in Dealnet News, News Home
DealNet Capital Secures Financing for HVAC Operations
By: Frehiwote Negash
DealNet Capital Corp. (DLS:CSE) announced Thursday that they have closed the first tranche of its senior secured debenture offering. The offering was initially announced on December 12, 2014. All funds raised thus far will be available immediately to One Dealer Financial, DealNet’s wholly-owned subsidiary and will be used to finance the consumer leases for the company’s HVAC operations. A sole investment of $3 million was made by a wealth management branch of one of Canada’s biggest life and health insurance companies with the option to invest up to $50 million through this offering. The commitment made by the insurance company is an encouraging sign for investors looking at the company as DealNet Capital expects to attract more institutional investment with their foray in the HVAC industry.
Under their subsidiary, One Dealer Financial, DealNet will provide financing and services to dealers as well as offering water heater rentals to consumers. Smaller companies in the HVAC space are less likely to receive assistance from financial intuitions that are already reluctant to invest. In this sense, DealNet has created a niche market by offering their expertise and enable these dealers to compete in a market controlled by a few players. The company will provide small dealers with loans and the use of its facilities to help expand their businesses. By identifying the need for these types of services in the HVAC industry, DealNet Capital has the opportunity to tap into an under-serviced market as small companies particularly those in the Ontario need and welcome companies that can offer a full range of services. There are currently 4 million households that rent their water heaters in the province with the majority of that market share held by a handful of providers and are squeezing out smaller players. That means fewer options for consumers to choose from and makes it difficult for smaller companies attempting to service the market and gain traction on their bigger competitors. Expansion into the American market is defiantly a part of the company’s plans – especially when you consider that there are 84 000 dealers in North America in the HVAC market making it a lucrative business opportunity.
With the closing of the first tranche, DealNet Capital is one step closer to opening up that market and providing the consumer with more options and dealers with the ammunition to compete in the space.
Source: DealNet Capital, Small Cap Power, Proactiveinvestors.com