Collection House (CLH:ASX) has now completed the third transaction under its partnership with global private investment firm Balbec Capital LP and its local related entity, InSolve Capital Australia Pty Ltd (collectively “Balbec”).
This year’s Balbec transaction under the CLH Portfolio Enhance Programme (“PEP”) will result in the Company receiving $10 million up front unencumbered cash in exchange for the assignment of five years’ cash flows from a segment of the Company’s Arrangement book with a face value of $24.8 million. Collection House and Balbec have again entered into a put/call option agreement to repurchase the residual cash flows at the end of the term of the agreement, at a market price determined by the performance of the accounts. The value of the put/call option is linked to CLH’s collection performance on those accounts. If cash collections from the sold arrangements are in line with projections, the year 5 put/call price will be minimal.
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