Keybridge Cuts Bridge Funding Interest Rate to 9% in $9.3M Deal with WAM

Bridge Funding to Stabilize Keybridge

Keybridge Capital Limited (ASX – KBC), an investment and financial services group with diverse holdings including life insurance and property sectors, has secured a crucial $9.3 million bridge funding facility. The funding, provided by Active Asset Management (WAM) and related entities, is designed to shore up Keybridge’s short-term liquidity and address pressing solvency concerns.

The arrangement comes at a critical juncture for Keybridge, which has suspended trading due to uncertainties around its funding position. The bridge facility provides a financial lifeline while the company undertakes a broader recapitalisation effort.

ASX Waiver Eases Regulatory Hurdles

Ordinarily, such a significant funding arrangement involving security over assets would require shareholder approval under ASX Listing Rule 10.1. However, the ASX has granted Keybridge a waiver from this requirement, allowing the company to secure the facility without prior shareholder consent. This waiver is conditional, including strict disclosure obligations and safeguards to protect shareholder interests, such as restrictions on asset disposal without approval.

Notably, the waiver acknowledges that WAM and its associated entities hold approximately 45% of Keybridge’s shares, and the transaction is structured to avoid conflicts of interest and value shifting. Independent directors, unaffiliated with WAM, have reviewed the terms and consider them fair and reasonable from the perspective of all shareholders.

Improved Funding Terms and Strategic Implications

The bridge facility’s interest rate has been reduced from 12% to 9% per annum, reflecting a more sustainable cost of funding for Keybridge. This reduction may ease some financial pressure as the company navigates its recapitalisation process.

While the funding addresses immediate liquidity needs, the broader strategic outlook remains uncertain. Keybridge’s ability to secure longer-term capital and restore market confidence will be critical in the coming months. The company’s next financial reports and updates will be closely watched for signs of progress.

Governance and Market Confidence

The involvement of WAM, a significant shareholder and related party, underscores the importance of transparent governance and regulatory oversight. The ASX’s conditions on the waiver aim to balance the need for urgent funding with protections against potential conflicts and asset misappropriation.

Keybridge’s board, including independent directors, appears committed to navigating these challenges responsibly. However, the suspension of trading and extended funding period highlight ongoing market concerns about the company’s financial health.