SYDNEY, March 12, 2024 /PRNewswire/ -- Aegros Limited ACN 618 589 101 (the Issuer) proposes to issue debentures (in the form of loan notes) in a series of tranches up to an aggregate face value of AUD25 million of (Debentures) for subscription by investors (Investors). The Issuer will invest the proceeds of calls to be made under the Debentures to fund eligible non-equipment research and development expenditure under the Australian Government's Research and Development Tax Incentive program and in the development of a biotechnology facility in Australia.

The Issuer is part of the Aegros Group, a leading biotechnology company developing better and more sustainable products to treat life threatening diseases.

The Debentures will typically be on more flexible lending terms than loan terms offered by the mainstream banks and thereby aim to achieve an enhanced return for the Investors.

The Debentures will be provided under the following tranches:

Tranche 1A: AUD10,000,000;
Tranche 1B: AUD5,000,000;
Tranche 2: AUD10,000,000,

and with a facility term up to 12-months.

Investors will earn 16.00% p.a. payable on drawn balances, calculated daily and paid monthly in arrears.

The Debentures will only be available to Investors who qualify as 'wholesale clients' for the purposes of section 761G of the Corporations Act 2001 (Cth) (Act). The Issuer has appointed FC Funds Management Pty Limited ACN 161 055 152 (AFSL 431245) (FC Capital) as its intermediary under section 911A(2)(b) of the Act for the purposes of FC Capital making offers to Investors to arrange for the issue, variation or disposal of the Debentures. The Issuer may only issue, vary or dispose of such Debentures in accordance with such offers, provided they are accepted.

FC Capital is a leading alternative asset management firm based in Australia with expertise in private credit and specialty real estate and has provided unique investment offerings to wholesale and sophisticated investors in Australia, Asia, North America and Europe for over 12 years.

The Issuer is seeking expressions of interest from prospective Investors for participation in the proposed Debenture issue to be undertaken in early to mid-2024.

A summary of the proposed Debenture issue is provided below.

For expressions of interest and further information, interested Investors are invited to contact Kieran McKee on +61 2 9072 9474 or at Kieran.McKee@fccapital.com.au. Interested Investors should also notify the scale of their prospective interest in the Debenture issue and any terms / conditions required in relation to that prospective investment.

The information provided in this Request for Expressions of Interest is general information only and does not take into account the investment objectives, financial situation or particular needs of any Investor or potential Investor. Persons considering acquiring Debentures should obtain independent advice tailored to their personal circumstances before making any investment decision in relation to the Debentures. The Issuer has been appointed by FC Capital as its corporate authorised representative under its Australian Financial Services Licence (AFSL) for the purposes of issuing this Request For Expression of Interest. The Issuer does not hold an AFSL and is not itself licensed to provide financial product advice in relation to an investment in Debentures. Investors considering making an investment in Debentures should read this document carefully before making a decision to acquire Debentures. No cooling off rights apply in relation to the issue of Debentures.


     
               Summary of the Proposed Debenture Issue





     
              Parties



     The Issuer / Borrower                               
     Aegros Limited



     Guarantors                                          
     Aegros Therapeutics Pty Limited ACN 003 131 548

                                                          
     Aegros Engineering Pty Limited
             
            ACN 623 563 100

                                                          
     Aegros Membranes Pty Limited ACN 624 585 299

                                                          
     Aegros Advanced Adhesives Pty Ltd ACN 670 911 403



                                                          
     and all subsequently established subsidiaries of the Borrowers subject to a 95% EBITDA and 95% Total Assets Guarantor Coverage test



     Group                                               
     All Borrowers, Guarantors, and subsidiaries of Aegros Limited



     The Arranger                                        
     FC Funds Management Pty Limited ACN 161 055 152



     
              Structure



     Facility Tranche 1                                  
     Senior Secured R&D & Working Capital Facility



     Facility Tranche 2                                  
     Senior Secured R&D & Working Capital Accordion Facility



     Security Ranking                                    
     The Facility will be first ranking senior secured over all Borrowers and all subsidiaries subject to a 95% EBITDA and 95% Total Assets Guarantor Coverage test



     Facility Limit                                      
     AUD25,000,000 (twenty-five million dollars)



     Tranche 1 Limit                                     
     AUD15,000,000 (fifteen million dollars)



     Tranche 1A Sub-Limit                                
     AUD10,000,000 (ten million dollars)



     Tranche 1B Sub-Limit                                
     AUD5,000,000 (five million dollars)



     Tranche 2 Limit                                     
     AUD10,000,000 (ten million dollars)



     Facility Term                                       
     12 months from first drawdown



     Financial Close                                     
     The date upon which all Conditions Precedent are met or waived by the Investors at their absolute discretion



     Purpose                                             
     To fund accrued non-equipment R&D Tax Offset Refunds (R&DTOR) available to the Borrower from the Australian Tax Office (ATO) and fund the completion of the HaemaFrac (R) facility at 6 Eden Park Drive, Macquarie Park, NSW 2113, Australia



     Facility Currency                                   
     Investors may elect to provide their commitments in either AUD or USD with formal documentation to incorporate relevant mechanisms and may include provision to the Borrower of both AUD and USD tranches





     Facility Tranche 2 Mechanism                          The Borrower must in the first instance approach existing Investors to provide the Tranche 2 Facility on the same terms and conditions as Facility Tranche 1. The existing Investors will have 4 weeks to provide credit approvals to the Borrower. If Investors do not provide approvals
                                                             within this timeframe, the Borrower may approach new Investors to provide the facility





     Borrowing Base                                      
     Availability is subject to the Borrowing Base calculated as follows:

                                                            A - (B + C) + D + E = F
            A = 85% of the non-equipment R&DTOR which has been accrued but not yet received as detailed in the Review Letter.
            B = Current outstanding of the Facility
            C = Any clawback amount advised by the ATO or taxes otherwise due to the ATO.
                                                              D = Orderly Liquidation Value of Property, Plant & Equipment per the Valuation Report
            E = 5% of the total Share Capital as at the date of the Utilisation Request
            F = The amount available for drawdown



     Availability                                        
     Available for drawdown until 30th September 2024 subject to Conditions Precedent to Drawdown and the Borrowing Base being satisfied



     Drawdown                                            
     Tranche 1A is to be fully drawn at Financial Close



                                                          
     Tranche 1B is subject to the Borrower raising an additional USD$5 million minimum equity capital by 31st March 2024

                                                          
     Tranche 2 is subject to the Borrower raising an additional USD$15 million by 30th June 2024



     Repayment                                           
     The Borrower may repay the Facility upon giving no less than 2 Business Days' notice. Any repayment shall be subject to a minimum of AUD1,000,000



     Cancellation                                        
     All repayment amounts will be a cancellation of the Facility Limit and not available for redraw



     
              Interest & Fees



     Arranging Fee                                       
     1.00% (plus GST) of the Tranche 1 Limit payable on Financial Close to Investors



     Interest Rate                                       
     16.00% per annum payable on drawn balances, calculated daily and paid monthly in arrears



     Unutilised Commitment Fee                           
     2.95% per annum payable to Investors on the undrawn balance of the Tranche 1B Sub-Limit, calculated daily and paid monthly in arrears



     Default Interest                                    
     Interest Rate plus 2.00% per month on drawn balances for periods in which an Event of Default is subsisting



     Minimum Earn                                        
     The Facility is subject to a minimum earn of 9 months interest on the Tranche 1 Limit (the Minimum Earn doesn't include any amount received in relation to the Arranging Fee, Work Fee and Due Diligence Fee)



     Cessation of Business Fee                           
     If the Borrower ceases business and an administrator or liquidator is appointed, a fee equivalent to 10% of the Facility Limit at the time of appointment will be payable to the Investors and become senior secured debt





     
              Review Events & Events of Default



     Review Events                                         The occurrence of a Review Event will automatically facilitate a 14-day review and discussion period between the Borrowers and Investors. If at the end of this 14-day period, the Investors acting reasonably are not satisfied with the outcome of these discussions, they may declare all
                                                             monies due and payable subject to a notice period of 7 days



     Events of Default                                   
     The occurrence of an Event of Default, subject to remedy period of 10 Business Days where the breach is capable of remedy, will entitle the Investors to declare that the amounts owing are immediately due and payable and/or its obligations under the Facility are terminated





     
              Security & Documentation



     Security

                                                            First ranking General Security Agreement (GSA) over all Borrowers and all subsidiaries. For the avoidance of doubt, this includes a charge or control over the Payment Account;
            Mortgage of Lease over the property at 6 Eden Park Drive, Macquarie Park, NSW 2113, Australia;
                                                             Consent to Mortgage of Lease over the property at 6 Eden Park Drive, Macquarie Park, NSW 2113, Australia; and
            Directors' fraud indemnity



     
              Conditions



     Condition(s) Precedent                              
     The following conditions are to be met ahead of completion

                                                          
     Satisfactory due diligence
            Perfected GSA over the Borrower, Guarantors, and subsidiaries
            Entry in final Facility Agreement and security documents



     Condition(s) Precedent to each drawdown             
     The following conditions are to be met ahead of each drawdown:

                                                          
     no Events of Default, potential Event of Default or Review Event is in subsistence



     
              Others



     Other matters                                       
     The legal documentation will include other issues not covered above that are normal for lending facilities of this type, including but not limited to:

                                                          
     Representations and warranties
            Positive and negative undertakings; and
            Rights for the Investor to syndicate or assign some or all of the Facility to a third-party



     Governing Law                                       
     New South Wales, Australia

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