VEF AB (publ) (“VEF”) has entered into a SEK 150 mln secured credit facility with Pareto Bank (the “Facility”). The Facility will effectively be used to refinance VEF’s outstanding bonds, allowing VEF to decrease its outstanding debt and reduce financing costs all while improving capital flexibility.
VEF has agreed to a SEK 150 mln (c. USD 15.7 mln) Facility with Pareto Bank. The Facility has a two-year maturity and is fully secured against VEF’s shares in its subsidiary, VEF Cyprus Limited. The Facility is set to replace its SEK 300 mln of bonds due in December 2026. Financing terms are materially improved, with the facility priced at Stibor + 415 bps on drawn amount versus current Stibor + 650 bps on the outstanding bond amount. The Facility is a fully flexible liquidity tool, bridging the Company through expected portfolio exits over the coming 12 to 24 months. It will be drawn and repaid in the ordinary course of managing the Company's liquidity.
In connection with entering into the Facility, VEF will redeem all its outstanding 2023/2026 bonds of SEK 300 mln (ISIN: SE0021147675) (the “Outstanding Bonds”). A notice of conditional early redemption will be sent to directly registered owners of Outstanding Bonds in the debt register maintained by Euroclear Sweden at the end of business on 18 September 2026. The redemption of the Outstanding Bonds is conditional upon the establishment of the Facility prior to 8 October 2026. The Outstanding Bonds will be redeemed at a price of 100.00 per cent of the nominal amount together with any accrued and unpaid interest and such amounts will be paid to each person registered as owner of Outstanding Bonds in the debt register maintained by Euroclear Sweden at the end of business on 8 October 2026.
Over the past 2 years VEF has delivered over USD 50 mln in exits, at or around our valuation marks, mostly used to pay down our debt. VEF considers the deleveraging phase of its capital strategy substantially complete. Following redemption of the outstanding Bonds, VEF will carry no bond bullet maturity and have a comfortable debt to NAV ratio of less than 4% at current NAV on a facility fully utilized.
Dave Nangle, VEF CEO, comments:
“With these actions, we continue a very clear and well communicated strategy of balance sheet strengthening. We issued SEK 500 mln of bonds in 2022 for a very specific purpose, to provide capital and liquidity support for our business and portfolio through a transitionary window for the private and venture markets. That period is now complete. A stronger balance sheet combined with a compounding underlying portfolio and growing exit track record opens up more capital tools and solutions, the type of which we are very happy to announce today. We also take this moment to thank our bondholders who have supported us through cycle.
Our capital allocation focus now shifts from our debt to share buybacks given our shares trade at a discount to NAV. A clear framework, plan and guidance will follow, in line with future exits and capital in.”