SOL Global Investments Corp. (“SOL Global” or the “Company“) (CSE: SOL) (OTCPK: SOLCF) (Frankfurt: 9SB) is pleased to announce that the litigation relating to a senior, secured non-convertible debenture issued and sold to 1235 Fund LP (“1235“) in the principal amount of CAD$50 million and bearing interest at 6.0% per annum (the “Debenture“) has been settled. As previously disclosed, SOL Global had commenced legal proceedings in New York against 1235 and another entity, and 1235 had commenced legal proceedings against SOL Global and others in Ontario. Both legal proceedings concerned the interpretation of the Debenture and related agreements and the rights of the parties under these agreements.
Pursuant to the settlement, a subsidiary of SOL Global will acquire all of 1235’s rights under the Debenture for CAD $120 million (which is CAD $68.5 million above the Debenture’s principal and accrued interest), which will be paid on September 7, 2021. To partially fund the acquisition, the subsidiary will receive an equity investment from SOL Global which has entered into a loan agreement with an arm’s length private lender for a secured loan in the principal amount of CAD$50 million (the “Loan“). The Loan will have a term of 12 months and will bear interest at the rate of 9% per annum. The Loan will be secured by a general security agreement.- ADVERTISEMENT –
“SOL Global is pleased that the litigation is at an end,” said SOL Global CEO, Andy DeFrancesco. “Although SOL Global’s subsidiary has sufficient holdings to fully fund the acquisition, we decided to take on a small loan rather than fund the acquisition solely from a sell down of our portfolio, as we see significant upside in our core holdings.”
“1235 can confirm that the litigation with SOL Global concerning the Debenture has been settled on a mutually acceptable basis,” said the Director of the General Partner of 1235.
