iCreate gets shareholder approval to convert nearly $70m of debt to equity
Shareholders of iCreate Limited voted their approval on Friday of a plan to convert debt owed to two financial backers to common shares, which will free the training company of nearly $70 million in loans.
Dequity Investment will end up with a 20 per cent stake in iCreate for the $50.5 million it lent to the digital company, while Kintyre Holdings will acquire nine per cent interest for a $18.3 million loan, Tyrone Wilson said.
Existing shareholders will see their stake in iCreate "diluted in terms of their percentage ownership but the dollar value will remain the same,” he added.
The ICREATE shares closed at $3.16 on Friday, down 7 per cent.
The vote comes ahead of plans to do a right's issue that will continue the restructuring of the company's balance sheet. It's proceeds will fund acquisitions, Wilson said.
The right's issue was signed off on by the company's board on May 19, and iCreate will now seek shareholder approval at the next annual general meeting or a special meeting, it said in a market filing.
The rights issue is to be arranged and brokered by VM Mutual Wealth Management Limited.
As to the business iCreate is looking to acquire, Wilson said only that it was a creative company.
“Our target is a big, well-established company with good cash flow, revenues and a high profit margin. I am not at liberty to say who but what I can say is the industry implications will be seismic,” he said.