On 30 August 2021, Flagship Investments Limited (ASX: FSI) announced the Company is seeking raise $20m through the issue of listed, redeemable, unsecured convertible notes (Notes). The Notes will have a face value of $2.70 (in line with the pre-tax NTA) and will pay an interest rate of 5.50%p.a, paid quarterly, until the first step-up date of 30 September 2024 at which point the interest rate will increase to 6.50%p.a if the 2-year BBSW is above 1.2832%. If the BBSW is not above this rate, the interest payment will remain at 5.50% until maturity. The Notes will have a maturity date of 1 October 2026, if not converted or redeemed prior.
The Offer opened on 7 September 2021 and is expected to close on 24 September 2021. The Notes are expected to commence trading on the ASX on 4 October 2021, with the ticker FSIGA.
Noteholders may convert some or all of their Notes into FSI ordinary shares during the Conversion Period, which commences on the second anniversary of the Initial Issue Date and ends 10 days prior to the Maturity Date. Notes will be converted on a one-for-one basis.
The Board intends to participate in Offer, intending to invest $5.2m, with Manny Pohl expected to invest the lions share of the Board’s investment.
FSI believe the issue of the Notes provides the ability to increase the size of the portfolio without being dilutive to exiting shareholders.