Calgary-based alternative asset manager Crown Capital Partners Inc. says it’s making progress in dealing with its cash crunch as it sells off some of its assets.
In an update this week, Crown said it already sold a real estate asset in London, Ont., for $3.4 million and it will sell the assets and business of its subsidiary Go Direct Global Inc. to an employee-led group for roughly $10 million. The firm will receive three quarters of the proceeds when the deal is slated to close this month. The remainder of the proceeds are expected over the subsequent 25 months.
The publicly listed firm said it’s also working on selling off other assets, with those transactions expected to close in the second quarter.
“Following completion of these sales, Crown will continue to own significant assets,” it said.
Time is of the essence.
So far, Crown has only repaid $3.2 million of the minimum $10 million it was required to pay its senior secured credit facility by March 31. To buy more time, it said it negotiated and reached a forbearance agreement with its lender. Under that agreement, the lender has agreed not to take enforcement action against the firm until April 30.
Crown said the proceeds from its asset sales will first be used to repay the senior secured credit facility, including the installment due on March 31, and then to “meet corporate obligations.”
After that anticipated initial amount is repaid, Crown will owe the lender another $7.2 million.
As well, the asset manager’s board of directors has directed management to develop a restructuring plan to “reduce corporate overhead and permit value maximization of the remaining assets.”
“Details of such plan will be made available when approved,” Crown said.