CLIFFSIDE CAPITAL LTD. REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS
TORONTO, Aug. 22, 2024 /CNW/ - Cliffside Capital Ltd. ("Cliffside" or the "Company") (TSXV: CEP) is pleased to announce financial results for the second quarter of 2024. The Company reported the following:
- Decline in gross finance receivables by 37.2% to $95.5 million, with a corresponding decline in securitization and subordinated debt by $41.2% to $82.2 million compared to Q2 2023
- Decline in net interest and other income by 35.4% to $6.2 million, consistent with the decline in gross finance receivables compared to Q2 2023
- Provision for credit losses declined by 29.7% to $3.0 million compared to Q2 2023
- Net loss before taxes of $1.1 million for the six months ended June 30, 2024
The acquisition of finance receivables paused in 2023 as the Company continued to assess macroeconomic conditions and undergo a strategic review by a special committee (the "Independent Committee"). The pause in acquisitions resulted in a 37.2% decline in gross finance receivables to $95.5 million and a corresponding 41.2% decline in the securitization and subordinated debt to $82.2 million compared to the same period in the prior year. This decline in gross finance receivables together with the tough macroeconomic environment, including high consumer debt levels, higher benchmark interest rates, and higher delinquencies have adversely impacted the Company's financial results.
On July 16, 2024, the Company and Cliffside Ltd. (the "Purchaser") publicly announced that they have entered into an arrangement agreement (the "Arrangement Agreement") with CFLP Limited Partnership and LC Asset Management Corporation. Pursuant to the Arrangement Agreement, the Purchaser will acquire all of the issued and outstanding common shares (the "Common Shares") in the capital of the Company from their holders ("Shareholders") by way of a statutory plan of arrangement (the "Arrangement") for consideration of $0.10 per Common Share (the "Cash Consideration"), other than Common Shares held by certain shareholders of the Company ("Share Electing Shareholders") that validly elect to receive common shares in the capital of the Purchaser ("Purchaser Shares") in exchange for their Common Shares ("Share Consideration" and, collectively with the Cash Consideration, the "Consideration"). Upon completion of the Arrangement, Cliffside will be a privately held company.
The Arrangement Agreement was the result of a comprehensive review of strategic alternatives and a negotiation process that was conducted at arm's length with the supervision and involvement of a committee of independent directors of Cliffside (the "Independent Committee"), as advised by external legal and financial advisors. The Independent Committee was appointed by the Board of Directors of the Company (the "Board") to, among other matters, review the potential transaction and potential alternatives and consider the Company's best interests and the implications to Shareholders and other stakeholders. The Board of the Company recommended that Shareholders vote in favour of the Arrangement. The Company has called and will hold an annual and special meeting of Shareholders on September 4, 2024, where the Arrangement will be considered and voted upon by Shareholders of record. For more details on the Arrangement, refer to the press release dated July 16, 2024 as well as Management Information Circular dated August 8, 2024.
Further information on Cliffside's financial results can be found at www.cliffsidecapital.ca, and a copy of the condensed consolidated financial statements for the three and six months ended June 30, 2024, prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board (IFRS Accounting Standards), including International Accounting Standard 34, Interim Financial Reporting, and the corresponding management's discussion and analysis will be available under the Company's profile on www.sedar.com.
Cliffside is focused on investing in strategic partnerships with parties who have specialized expertise and a proven track record in originating and servicing loans and similar types of financial assets. Cliffside's strategy is to generate revenue as an investor, affording its shareholders an opportunity to invest in the growing alternative lending sector with the potential for attractive yields and minimal operational risk while earning a reliable total return. For more information, see Cliffside's filings on SEDAR at www.sedar.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the business and operations of Cliffside and the ability of the Independent Committee to successfully complete a Potential Strategic Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the results of operations; potential for conflicts of interests; the availability of appropriate finance receivables that may be purchased by the Company's limited partnerships under existing funding facilities; and volatility of common share price and volume. There can be no assurance that such statements will prove to be accurate or complete, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cliffside disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, contact:
Praveen Gupta, CFO
(647) 776-5810
SOURCE Cliffside Capital Ltd.
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