- 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 was intended to provide a route to liquidity from the client’s shareholding ahead of completion of the deSPAC process, providing a short-term source of capital while the transaction progressed.
The financing requirement was 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 considerations 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, providing the information required for lenders to assess the underlying security and the short-term borrowing requirement. Despite the complexity of the transaction, Enness 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.
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.
