SJ Mercury/Reuters: Corel strikes much-needed financing deal

[ Thanks to George
for this link. ]

“Software developer Corel Corp. said Tuesday it has struck a
complex share purchase deal that would add $56 million in
much-needed cash to its coffers if exercised today. Corel, facing
slumping sales and the recent resignation of high-profile chief
executive Michael Cowpland, said that under the deal it can
sell up to 14.7 million shares in draw down periods over 24 months
to an unnamed institutional investor.”

“This is an uncommon, but not unique, style of structure. Most
companies don’t need to do this,” said Duncan Stewart, fund manager
at Tera Capital Corp., who does not presently hold any Corel stock
but has in the past. “Corel is a company that is in less robust
health than your average high-tech company and therefore they have
to do something that is a little bit unusual — there’s nothing
illegal, there’s nothing fishy, there’s nothing suspicious.”

“Ottawa-based Corel said the investor is entitled to buy shares
at 95 per cent of the average daily price during certain
periods, provided that price exceeds a threshold price set by
Corel said it may also enter into other types of
financing transactions that are not based on an equity line

Complete Story

Get the Free Newsletter!

Subscribe to Developer Insider for top news, trends, & analysis