- Client: Korean-listed company
- Market Capitalisation: $100 million+
- Financing Requirement: Circa $15 million
- Term: 5 years
Enness was approached by a Korean-listed company looking to raise approximately $15 million against its listed shares. The objective was to access additional liquidity to support further investment and growth opportunities without having to sell down the company’s existing shareholding.
The shares were held through an offshore company, with the ultimate beneficial owner (UBO) being an employee of the listed company. The UBO was an experienced entrepreneur who also held board positions across several listed companies. A significant proportion of their wealth was concentrated in the Korean-listed stock, creating a need for additional liquidity without disrupting the underlying investment position.
Given the concentration of wealth in a single listed security, a conventional lending structure was not considered suitable for the proposed transaction. Enness therefore explored a single-stock loan, allowing the shares to be used as collateral while providing the borrower with access to capital for its wider investment and growth objectives.
Enness secured a non-recourse financing structure with a five-year term. The shares formed part of the lender’s collateral for the duration of the facility, with the treatment of the borrower’s economic interest and other shareholder rights determined by the agreed structure and facility terms.
Single-stock lending can provide an alternative source of liquidity for shareholders and businesses with significant wealth concentrated in one listed security. Rather than selling shares to generate capital, borrowers can potentially use the value of existing holdings to access funding while maintaining exposure to the underlying investment, subject to lender criteria and the agreed structure.
Depending on the structure, securities-backed finance can provide liquidity for further investment opportunities without requiring the underlying securities to be sold. Facilities can also be structured around factors such as the required loan amount, term, repayment profile and currency, subject to the lender’s assessment of the underlying security and the borrower’s circumstances.
In this case, the five-year facility provided the company with additional liquidity to pursue its growth strategy while avoiding the need to dispose of its concentrated shareholding. The transaction demonstrates how specialist securities-backed lending can be used to unlock liquidity from listed investments while maintaining exposure to the underlying asset, subject to the agreed facility terms.
Enness works with specialist lenders across a range of listed securities and complex shareholder structures. If you are looking to raise capital against a concentrated shareholding without immediately selling your investment, speak to a finance specialist to discuss your requirements.
Securities-Backed Lending Disclaimer: Enness does not provide advice on Securities-Backed Lending or investments. Lender introductions are unregulated. Terms and availability are subject to the individual circumstances, underlying securities and lender criteria.
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.
