Bench of Alberta at the Court of Queen has further extended Poynt Corporation’s creditor protection. While the credit protection is now valid until November 26, 2012, the Court has also authorized a contract for a debtor-in-possession (DIP) financing, drafted by Poynt.
As part of the DIP financing contract, an accumulative sum of $1.02 million will be provided at an interest rate of 20 percent.
A solitary financer or DIP Lender has offered the DIP Financing, wherein all the assets of Poynt will be offered as security. The DIP Lender will be authorized to collect the money as and when they choose, if Poynt fails to pay back on time.
Poynt is expected to repay the entire amount of DIP financing within a year beginning October 15, 2012.
Alternatively, the amount will be repaid either when Poynt triumphantly accomplishes all necessities of its Notice of Intention to Make a Proposal under Canada’s Bankruptcy and Insolvency Act, or on the fifth working day after the date on which the stay of proceedings, which has been authorized in the Proposal Proceedings, ends or is raised.
The loan secured by Poynt is a dedicated revolving loan, which may be drawn on an everyday basis in individual advance sums. The DIP Lender will also be provided an advance notice of a day.
In a statement, Andrew Osis, CEO at Poynt, said, "With this latest round of DIP Financing, the company expects to announce a plan to address the Proposal Proceedings with our creditors in the near term. Under creditor protection, the Company has delivered a new and improved version of the Poynt platform to our users, has strengthened global partnerships and grew its unique user base to nearly nineteen million users. In addition, the Company has significantly improved operational efficiencies and reduced costs. The Company is now in a strong position moving forward that will allow us to maximize shareholder value over the long-term."
Poynt is expected to offer a total of 4,000,000 common shares to the DIP Lender to reflect the DIP Lender’s risk of offering the DIP Financing. The offer will be provided after all the necessary regulatory approvals have been obtained.
Edited by Braden Becker