Capital raise & new income producing deal
Adamas Finance Asia has just made two significant announcements: a conditional share sale and purchase agreement with an existing portfolio investment, and a bond issue. The new capital supports ADAM’s capability to execute on its extensive pipeline, further diversify its portfolio and grow its income. These will help support ADAM’s underlying equity valuation and growth strategy, income for shareholders, and ensure that it will be able to commence dividend payments to its investors soon. It also confirms ADAM’s ability to access a broader range of financing options.It has raised c USD1.9m gross via a US Dollar-denominated corporate bond, issued to family offices in the Middle East. This bond matures in October 2022 and is secured via a fixed and floating charge on ADAM’s assets. It represents the first close of a corporate bond issuance programme of up to USD 10m. The first tranche carries a 12.5% pa cash coupon, payable semi-annually, and ADAM may change the terms of future corporate bond issuances under this programme.
ADAM has conditionally agreed to acquire 40% of a new SPV, Infinity TNP (ICG TNP), a wholly owned subsidiary of existing investment, Infinity Capital Group Limited (ICG). ICG develops premium residential projects in the Asia Pacific region, including Hirafu Village, a ski resort in Niseko, Japan. ADAM has agreed to pay ICG £5.63m for 40% of ICG TNP, settled via 16.18m ADAM shares at 34.8p/share. Post the transaction, ICG will hold 16% of ADAM’s issued share capital.
The company plans to target an ungeared annualised total (income and capital growth) return of between 14% and 16% from its new investments. Based upon its existing pipeline, it expects to have fully invested the new capital by the end of the current year.
Proforma NAV/share is 73p, versus a stock price of just 24p.
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