- Enthusiast Gaming Holdings (EGLX) hopes to strengthen the balance sheet by C$50 million
- The hope is to use the combination of the bought deal equity financing and early conversions of convertible debentures
- When completion of the modifications take place, C$9 million in principle amount of debentures will have been converted into over 2.9 million common shares
- Enthusiast hopes to have strengthened its balance sheet by more than C$50 million while reducing annual interest costs by C$0.8 million
- Enthusiast Gaming is up 4.61 per cent and is C$6.58 per share at market close
Enthusiast Gaming Holdings (EGLX) hopes to strengthen the balance sheet by C$50 million.
The hope is to use the combination of the bought deal equity financing and early conversions of convertible debentures.
Enthusiast notified its holders with an issued notice of its convertible debentures to exercise its option to convert outstanding debentures, which were supposed to mature on December 31, 2021.
When completion of the conversions occur, C$9 million in principle amount of debentures will be converted into over 2.9 million common shares.
Led by Canaccord Genuity Corp. Enthusiast previously announced, it had entered into an agreement with a syndicate of underwriters.
As a whole, the underwriters have agreed to sell on a bought deal basis. The agreement will contain up to over 7.38 million common shares issued by treasury for total gross proceeds to Enthusiast of approximately C$42.5 million.
Concerning the offering, a selling shareholder will sell an additional 2.8 million common shares.
In short, by reducing Enthusiast’s indebtedness through the conversion of the debentures and raising C$42.5 million–given a successful deal of the bought deal financing–Enthusiast hopes to have strengthened its balance sheet by more than C$50 million while reducing annual interest costs by C$0.8 million.
CEO of Enthusiast Gaming, Adrian Montgomery, added his thoughts on the recent news.
“This week, we took a major step to add a sizeable amount of growth capital while also significantly reducing our borrowings and interest costs,” he said.
“These two actions will strengthen our balance sheet ahead of our proposed Nasdaq listing, while we push forward with the execution of our growth strategy, which includes acquiring accretive properties which we can integrate into our platform,” he added.
Enthusiast Gaming has built an extensive social network of communities for gamers and esports fans. According to its reports, Ethusiast’s reach has spanned over 300 million gaming enthusiasts monthly.
Enthusiast Gaming is up 4.61 per cent and is C$6.58 per share at market close.
