Callidus Capital Corp. is getting an extension on US$250-million in debt from its parent company, financier Newton Glassman’s Catalyst Capital Group Inc., in a recapitalization that follows several quarterly losses and a skid in market value.
In statement issued late on Friday, Callidus said Catalyst funds will extend a US$250-million bridge loan as well as provide $15.5-million to refinance another loan from a Canadian financial institution.
Callidus, which provides financing to distressed companies, said Catalyst would advance it an additional $35-million under the bridge loan if it is determined that the company’s solvency is in question.
The move comes after the sudden departure this month of Callidus’s interim chief executive officer, Patrick Dalton, who had taken the helm late in 2018. He took the post while the founding CEO, Mr. Glassman, recovered from back surgery.
Callidus has suffered a number of setbacks, including underperforming loans, a rebuke by the Ontario Securities Commission about some of its financial reporting, a string of quarterly losses and the termination of the dividend. Catalyst already guarantees some of Callidus’s debt.
The company, which is more than 70 per cent owned by Catalyst, also said on Friday it plans to issue its fourth-quarter 2018 results on Monday after markets close.
Callidus said the bridge loan will be payable on demand, but that no demand can be made before June 30, 2020, if the company’s board determines that repayment would harm its cash position.
Mr. Glassman took Callidus public in 2014 at $14 a share, but the stock is down 89 per cent since then.
In December, Bahamas-based Braslyn Ltd., Callidus’s second-largest shareholder, proposed to buy out the minority shares for $2 each. Braslyn, owned by the Tavistock Group the holding company controlled by British billionaire Joe Lewis, has yet to say if it is making a formal offer.