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One of Estonian largest claim handlers – PlusPlus Capital AS – is raising additional funding through Crowdestate.
We have published our new investment opportunity, where PlusPlus Capital AS (PPC), one of the largest claim buyers in Estonia, is looking to raise 600.000 euros to fund the acquisition of another nonperforming claims portfolio from a large commercial bank operating in Lithuania. The investment’s time horizon is two years, investment’s annual return is 13% and the investment is secured by pledged claim portfolio.
We have structured the transaction in a way, where Crowdestate’s investor’s position would be as convenient as possible and comparable to other PPC’s investors. Before transferring the raised funds to PPC, the acquired claims portfolio will be pleged in favor of Crowdestate Collateral Agent. Although PPC is financially strong company capable of servicing its liabilities, the collateral is needed when company might become insolvent and allows for taking overand reselling the acquired claims portfolio.
PPC’s previous portfolio acquisitions have been very successful, where the claims have been bought with up to 60% discounts from face values. After restructuring the acquired portfolios, PPC has been able to recover the purchase price 2 – 3 times.
Crowdestate investors investment guarantee of adequate control is exercised over a rolling basis. Among other things, Monitoring, PPC acquired the entire portfolio would be a requirement of a minimum of 200% of customers. This proportion changes PPC must make repayment to investors and repay some of the money in a way that the ratio according to the agreement is maintained.
PPC is currently well capitalized for next acquisitions, but probably the following deals will be (partially) funded using external funding. To keep the company’s capitalization levels strong, 40% mandatory equity ratio covenant has been included in the agreements.
We believe that financing PPC’s claims acquisition business is an interesting and profitable investment opportunity, allowing our investors’ to participate in PPC’s growth.