Softlogic Finance in talks for $ 10 m loan from FMO

Softlogic Finance Plc is negotiating a US$ 10 million loan facility from Netherlands FMO.

The planned financing comprises $ 6 million in senior loan and $ 4 million in unsecured convertible subordinated loan.

Softlogic Finance said if this facility is extended the Company would be unique as it has a convertible subordinated facility that has an option to convert in to equity at a pre-agreed strike price based on the Net Asset Value (NAV).

The subordinated loan will form part of the Company’s Tier 2 capital requirements on disbursement that will facilitate the growth envisaged as per the three year business plan approved by the Board recently.

If the option to convert shares is exercised by FMO, the facility would further convert to Tier 1 capital.

The Company also said if extended the facility will enable Softlogic Finance to secure its first overseas funding line from a reputed international development finance institution that could be the catalyst in securing further transactions of this nature and propel Softlogic Finance to the next league.

The $ 10 million facility is subject to regulatory and shareholder approval.

Upon obtaining approval the FMO will commence its due diligence mission, credit approval and legal documentation to arrive at a decision to disburse the facility. Softlogic Finance expects this procedure to be completed within 2 or 3 months. To get shareholder approval an EGM has been convened for 26 July.

Softlogic Finance said as per FMO’s letter it is only an indicate term sheet and not intended as nor should be construed to be a commitment of an offer by FMO to arrange or provide any financing whether on the terms set out or on any other terms and that any proposal would be subject to due diligence scheduled for August and approved by their internal credit committee and documentation in a form and substance satisfactory to them.