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Canadian private equity firm provided SFX with its $20 million
By Chris Cooke | Published on Friday 22 January 2016
Flagging EDM peddler SFX has filed paperwork with the US Securities & Exchange Commission providing more information about the $20 million of extra finance the company secured last week.
SFX currently has the consultants in trying to figure out a way forward for the company, which has seen its share price tank in the last twelve months after a tricky year, and two aborted attempts by founder Robert FX Sillerman to take the publicly listed firm back into private ownership. There have been many rumours of bankruptcy in recent months.
Earlier this week SFX said that the extra $20 million in cash flow will provide “capital for working and general corporate purposes”. Meanwhile, the SEC filing confirms that the new credit facility is being provided by Toronto-based Catalyst Capital Group, a private equity set up which specialises in “investments in distressed situations”, just like this one.
The SEC filing notes that “the facility is secured, subject to certain exceptions, by a first-priority security interest in substantially all of the assets and property of the borrower and the guarantors”. The guarantors are many of SFX’s various subsidiaries around the world, and the arrangement means that – while the funding aims to provide the dance music firm the room for manoeuvre it needs to turn round its fortunes – if it all goes wrong, Catalyst will be one of the first creditors to get its money back.
