• Funding facility with Dubai based Bracknor Investment Group
• Convertible Bond with options structure with no repayment risk to YPB and no interest payment risk
• YPB controls the timing of the use of the facility
Bracknor is a Dubai‐based investment group demonstrating a strong partnership focus with its investee companies. Its portfolio companies are primarily in France, the UK and Finland. Bracknor views itself as an “investor-‐partner in businesses” and aims to “finance outstanding but not yet fully recognized business models that need uplifting capital to achieve their true potential”. YPB will become Bracknor’s first investment in Australia.
YPB has directly confirmed with a number of Bracknor investee companies that it is a valuable and reputable funding partner. It has strong relationships with management and is a trusted advisor on business strategy and capital management.
The facility is a USD 10,000,000 interest free mandatory convertible bond with warrants funding programme over 3 years. The security must convert to equity and therefore has no principal repayment risk. It is a zero coupon security and therefore has no interest payment risk. The effective interest rate for the whole facility if fully drawn to USD 10,000,000 will be 10.3% with conversion for the first tranche at a 12% discount to face value and conversion of each subsequent tranche at a 10% discount. There is also a facility commitment fee of 2.5% of the total commitment payable in proportion to each drawdown for the first $6,000,000 to be satisfied in YPB shares. This takes the budgeted total cost of funds if fully drawn to 12.8%. The payment in shares aligns Bracknor’s interests with those of shareholders.
