ARC Funds Limited (ASX:ARC), an investment firm that provides clients with diverse investment opportunities across multiple asset classes, has announced a strategic purchase of convertible notes in Ausbiz TV Pty Ltd. The company will acquire $2.15 million in convertible notes from existing holders for a purchase price of $430,000.
The consideration for the convertible notes will be the issuance of 4,095,237 new ARC shares at a price of $0.105 per share. Additionally, ARC Funds will issue a further 372,167 ARC shares at the same price in exchange for $78,155 of interest due on some of the notes, with 50% of the interest amount being converted into a new loan agreement between Ausbiz Group and ARC. The total number of new shares to be issued will be 4,467,404.
The company plans to utilise its placement capacity under Listing Rule 7.1 to issue the consideration shares to the vendors of the convertible notes. The key terms of the convertible notes include a 10% per annum interest rate, payable quarterly, and a maturity date of 31 October 2028. ARC has the option to convert the notes into shares in Ausbiz Group at any time up to maturity, with the conversion price determined by an independent valuation at the time of conversion.
ARC’s management believes that this investment aligns with their strategic objective of providing clients with a diverse range of investment opportunities across multiple asset classes, and projects this investment to provide ARC $215,000 a year of additional income. Both businesses will collaborate closely on integrating Ausbiz Group’s content into ARC’s Term Deposit Investor Platform, as well as exploring opportunities to drive efficiency and profitability.
