Wingara AG’s $250,000 Loan Facility Carries 12% Interest and Conversion Rights
Wingara AG Limited has arranged a $250,000 unsecured loan facility from NAOS Asset Management entities, featuring a convertible note option that could reshape its capital structure.
- Unsecured $250,000 loan facility at 12% interest per annum
- Repayment due by December 31, 2026, or earlier upon $1 million capital raise
- Option to convert loan into convertible notes subject to shareholder approval
- Convertible notes carry a 12% coupon and 25% discount conversion price
- Facility supports ongoing transaction opportunities for Wingara AG
Wingara AG’s New Financing Move
Wingara AG Limited, an agricultural technology and services company, has secured a $250,000 loan facility from entities associated with NAOS Asset Management Ltd. This unsecured facility comes with a relatively high interest rate of 12% per annum, which accrues daily and is capitalised quarterly, reflecting the company’s current funding needs and risk profile.
Terms and Strategic Implications
The loan is structured to mature on December 31, 2026, but Wingara AG has the option to repay earlier if it successfully completes a capital raising of at least $1 million. This flexibility suggests the company is actively exploring growth or acquisition opportunities and needs interim funding to navigate these transactions.
Importantly, the loan includes a convertible note feature, subject to shareholder approval. This means the lender could convert the outstanding loan amount plus accrued interest into ordinary shares at a conversion price discounted by 25% to the prevailing market price or offer price if a prospectus is issued. This conversion option could lead to shareholder dilution but also aligns the lender’s interests with the company’s future success.
Convertible Notes Details
The convertible notes carry the same 12% coupon rate as the loan, with interest capitalised every three months. They do not grant voting or dividend rights, which is typical for such instruments, but include standard protections against dilution from corporate actions. The notes are transferable and unsecured, reflecting a relatively straightforward debt-to-equity conversion instrument.
Looking Ahead
Wingara AG’s announcement signals a cautious but proactive approach to funding its strategic initiatives. The company’s ability to secure this facility from a reputable investor like NAOS Asset Management indicates confidence in its prospects, though the relatively high interest rate and conversion discount highlight the risks and challenges ahead.
Shareholders will be watching closely for the upcoming general meeting where approval for the convertible notes will be sought, as this will determine the ultimate impact on the company’s capital structure and shareholder base.
Bottom Line?
Wingara AG’s new loan facility sets the stage for potential capital raising and shareholder dilution ahead.
Questions in the middle?
- Will Wingara AG successfully complete the $1 million capital raising to repay or convert the loan?
- How will shareholders respond to the convertible note approval at the upcoming meeting?
- What transaction opportunities is Wingara AG pursuing that require this interim funding?
