At Global Pacific we have negotiated a number of funding arrangements where clients have taken an extremely profitable position to enable sound business and property proposals to proceed.
Following are a few examples.
- Business owner starting a new business needs to raise funds for the purchase of plant and for working capital requirements. JV partner has unencumbered bare land that is returning no income. He puts up the land as collateral security to facilitate 100% plant financing plus overdraft facility. In return the JV partner receives a fee and a shareholding in the new business, thereby converting an inactive asset to a revenue generating one.
- Developer needs to refinance a large land bank holding with future development potential. An Investor purchases the property for a sum now and the vendor takes a call option to purchase the property back at some months in the future at a higher sum. This provides the Investor with either an attractive interest rate if the call option is exercised, or the property at a substantial discount if it’s not. The vendor may have the right to extend the call option date for up to an agreed number of months by further monthly payments in advance.
- Property investor requires funding to purchase and refurbish an empty commercial building which will then be let to new tenants. There is no return from the property in the meantime. JV partner can show good income and acts as a secondary guarantor to show debt servicing ability for the project. If the loan goes into default, and the primary guarantor cannot rectify this, the JV partner takes control via a call option to complete the project and benefits from the increase in value of the property.
- A developer has a consented sub-division which he is unable to fund due to exposure to other financiers. JV partner comes in as a guarantor to the facility to enable the financing to proceed. JV partner charges a negotiated fee for his guarantee, and has a call option over the shares in the borrowing entity should a default occur.
- Property investor enters into a relationship with a JV partner who provides the equity to buy a commercial property that can be refurbished and re-let to improve the rental income and therefore the value of the property itself. Bank finance has been arranged. Owner meets all obligations to the bank including interest payments and personal guarantees, in return for sharing in the income and future increase in value of the property.
There are numerous opportunities like the above where we have both sound projects looking for joint venture partners and investors looking to take a position in them.
Some are Private Placements available only to Eligible Persons as defined in the Securities Act. For the definition of an Eligible Person click here
To find out more, phone your consultant or to enquire on line click here.