Keybridge Capital's Response to ASX Queries: Financial Health and Loan Transparency
KEYBRIDGE CAPITAL LIMITED (KBC) Share Update November 2024 Friday 29th
Keybridge Capital Responds to ASX Queries Amid Financial Scrutiny
Keybridge Capital Limited (ASX: KBC) has issued a detailed response to queries from the Australian Securities Exchange (ASX) regarding its financial condition and recent loan activities.
Instant Summary:
- Keybridge maintains its financial condition is adequate with assets over $25 million.
- A $4.95 million unsecured loan to an 'asset rich entity' has been documented.
- Supreme Court ruling favored Keybridge, affirming its solvency.
- Additional financing options include a $3.5 million debt facility and a $1.7 million equity raise.
Background of the ASX Queries
On 28 November 2024, Keybridge Capital Limited responded to a series of queries from the ASX concerning its financial disclosures and the adequacy of its financial condition. The queries arose following Keybridge's annual report and subsequent financial statements, which highlighted various financial activities and transactions.
Financial Condition and Asset Backing
Keybridge asserted that its financial condition remains robust, citing total assets exceeding $25 million and a profit after tax of more than $7 million for the year ending 30 June 2024. The company emphasized its ongoing efforts to explore debt and equity capital raising opportunities to bolster its financial standing.
Unsecured Loan to 'Asset Rich Entity'
A significant point of interest was the $4.95 million unsecured loan to an entity owned by Mr. Bolton. Keybridge clarified that the loan agreement was executed on 30 September 2024, with commercial terms and a maturity date aligned with the Restraint of Conduct Liability owed to Mr. Bolton. The loan, previously undocumented, is now secured by a formal agreement.
Legal and Financial Developments
Keybridge highlighted a favorable ruling from the NSW Supreme Court, which affirmed the company's solvency. Additionally, Keybridge disclosed new financing arrangements, including a $0.75 million loan from Yowie and a potential $0.75 million debt finance offer from Roadnight Capital, alongside a planned $1.7 million equity capital raise.
The detailed response from Keybridge aims to reassure investors and the market of its financial stability and transparency. The documented loan agreement and favorable legal ruling could mitigate concerns about the company's financial practices. However, the ongoing scrutiny and need for additional financing may continue to weigh on investor sentiment.
Investor Reaction:
Analysts are likely to view Keybridge's proactive response positively, though concerns about the company's reliance on additional financing and the implications of its unsecured loan may persist. Investor confidence could hinge on the successful execution of its capital raising plans.
Conclusion:
Investors should monitor Keybridge's financial developments closely, particularly its capital raising efforts and any further updates on its financial condition. Staying informed on the company's strategic decisions will be crucial for assessing potential impacts on investment portfolios.