TORONTO,
Aug. 22,
2024 /CNW/ - Cliffside Capital
Ltd. ("Cliffside" or the "Company") (TSXV: CEP) is
pleased to announce financial
results for the second quarter of
2024. The Company reported the following:
- Decline in gross finance receivables by 37.2% to $95.5 million, with a corresponding decline in
securitization and subordinated debt by $41.2% to $82.2 million compared to Q2 2023
- Decline in net interest and other income by 35.4% to
$6.2 million, consistent with the
decline in gross finance receivables compared to Q2 2023
- Provision for credit losses declined by 29.7% to $3.0 million compared to Q2 2023
- Net loss before taxes of $1.1
million for the six months ended June
30, 2024
The acquisition of finance receivables paused in
2023 as the Company continued to assess
macroeconomic conditions and undergo a strategic review
by a special committee (the "Independent
Committee"). The pause in acquisitions resulted in a 37.2% decline
in gross finance receivables to $95.5 million and a corresponding 41.2% decline
in the securitization and subordinated debt to $82.2 million compared to the same period in the
prior year. This decline in gross finance receivables together with
the tough macroeconomic environment, including high consumer debt
levels, higher benchmark interest rates, and higher delinquencies
have adversely impacted the Company's financial results.
On July 16, 2024,
the Company and Cliffside Ltd. (the "Purchaser") publicly announced
that they have entered into an arrangement agreement (the
"Arrangement Agreement") with CFLP Limited Partnership and LC Asset
Management Corporation. Pursuant to the Arrangement Agreement, the
Purchaser will acquire all of the issued and outstanding common
shares (the "Common Shares") in the capital of the Company from
their holders ("Shareholders") by way of a statutory plan of
arrangement (the "Arrangement") for consideration of $0.10 per Common Share (the "Cash
Consideration"), other than Common Shares held by certain
shareholders of the Company ("Share Electing Shareholders") that
validly elect to receive common shares in the capital of the
Purchaser ("Purchaser Shares") in exchange for their Common Shares
("Share Consideration" and, collectively with the Cash
Consideration, the "Consideration"). Upon completion of the
Arrangement, Cliffside will be a privately held company.
The Arrangement Agreement was the result of a
comprehensive review of strategic alternatives and a negotiation
process that was conducted at arm's length with the supervision and
involvement of a committee of independent directors of Cliffside
(the "Independent Committee"), as advised by external legal and
financial advisors. The Independent Committee was appointed by the
Board of Directors of the Company (the "Board") to, among other
matters, review the potential transaction and potential
alternatives and consider the Company's best interests and the
implications to Shareholders and other stakeholders. The Board of
the Company recommended that Shareholders vote in favour of the
Arrangement. The Company has called and will hold an annual and
special meeting of Shareholders on September
4, 2024, where the Arrangement will be considered and voted
upon by Shareholders of record. For more details on the
Arrangement, refer to the press release dated July 16, 2024 as well as Management Information
Circular dated August 8, 2024.
Further information on Cliffside's financial
results can be found at www.cliffsidecapital.ca, and a copy of the
condensed consolidated financial statements for the three and six
months ended June 30, 2024, prepared
in accordance with International Financial Reporting Standards, as
issued by the International Accounting Standards Board (IFRS
Accounting Standards), including International Accounting Standard
34, Interim Financial Reporting, and the corresponding management's
discussion and analysis will be available under the Company's
profile on www.sedar.com.
About Cliffside
Cliffside is focused
on investing in strategic partnerships with parties who have specialized expertise and a
proven track record in originating and servicing loans and similar
types of financial assets. Cliffside's strategy is to generate
revenue as an investor, affording its shareholders an opportunity
to invest in the growing alternative lending
sector with the potential for attractive yields
and minimal operational risk while
earning a reliable total return.
For more information, see Cliffside's filings
on SEDAR at www.sedar.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain
"forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not
limited to, statements with respect to the business and operations
of Cliffside and the ability of the Independent Committee to
successfully complete a Potential Strategic Transaction.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other
factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; the results of operations; potential for
conflicts of interests; the availability of appropriate finance
receivables that may be purchased by the Company's limited
partnerships under existing funding facilities; and volatility of
common share price and volume. There can be no assurance that such
statements will prove to be accurate or complete, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Cliffside disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
For further information, contact:
Praveen Gupta, CFO
(647) 776-5810
pgupta@cliffsidecapital.ca
SOURCE Cliffside Capital Ltd.
