- Client: Monaco resident, national of a Nordic country
- Net Worth: €600m+
- Security: Significant shareholding in a company undergoing a deSPAC transaction
- Loan Amount: €10m
- Product: Pre-IPO loan
- Term: 12 months
- Interest Rate: 1.75% per month
Enness was approached by an ultra-high-net-worth individual from a Nordic country who was looking to raise €10m against a significant shareholding in a company undergoing a deSPAC transaction. The client was resident in Monaco and had a net worth of more than €600m, although a substantial proportion of their wealth was tied up in shares rather than liquid assets.
The client was the ultimate beneficial owner of a privately held holding company that was preparing to list through a strategic merger with an already-listed special purpose acquisition company (SPAC). The proposed transaction would allow the client to access liquidity from their shareholding ahead of the completion of the deSPAC process, providing a short-term source of capital while the transaction progressed.
The financing requirement was effectively structured as a pre-IPO loan, with the client's shares being used as collateral. This type of lending requires a highly specialist approach, as lenders need to consider factors including the anticipated post-listing valuation, the expected timing of the listing and the future prospects and management of the business.
The transaction was particularly complex because it involved a deSPAC rather than a more conventional pre-IPO process. Regulatory restrictions can become increasingly important as a deSPAC transaction approaches completion, while the lender also needs to understand the precise structure and timeline of the proposed transaction before accepting the shares as security.
Enness worked with specialist lenders to present the structure and the client's financial position in detail, helping to demonstrate the strength of the underlying security and the rationale for the short-term borrowing requirement. Despite the complexity of the transaction, we successfully secured a €10m facility on a 12-month term at 1.75% per month.
Pre-IPO loans can provide entrepreneurs and shareholders with access to liquidity before a planned listing or corporate transaction is completed. However, the structure, security and lender appetite can vary significantly from one transaction to another. Enness works with specialist lenders to structure financing around complex shareholdings and corporate events.
If you are considering raising finance against a pre-IPO or privately held shareholding, Enness can assess the structure and explore suitable lending options. To discuss your requirements, speak to a mortgage specialist.
Risk Warning:
Pre-IPO and securities-backed lending carries significant risks. Share values can fluctuate substantially, and the anticipated listing or transaction may be delayed, altered or not completed. If the value of the security falls or the terms of the facility are not met, the lender may take enforcement action against the pledged assets. Borrowers should carefully consider the risks associated with using shares as collateral.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Enness does not give advice on Securities-Backed Lending or investments and lender introductions are unregulated. Finance is subject to status, underwriting, security assessment and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed transaction.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
