Clime Capital Limited (ASX, CAM) has announced a $14 million convertible note offer featuring a 6.5% fixed interest rate and a maturity date in 2028. The notes are convertible into ordinary shares on a one-for-one basis, providing investors with a hybrid income and equity exposure.
- Offer size up to $14 million via unsecured, redeemable convertible notes
- Fixed 6.5% annual interest payable monthly in arrears
- Convertible into ordinary shares at $1.00 per share on a one-for-one basis
- Priority Offer for existing and past shareholders and noteholders
- Proceeds to fund redemptions and further investments aligned with CAM’s strategy
Clime Capital’s Convertible Note Offer
Clime Capital Limited (ASX, CAM), a listed investment company focused on Australian securities, has launched an offer to raise up to $14 million through unsecured, redeemable convertible notes. These notes, priced at $1.00 each, carry a fixed interest rate of 6.5% per annum, payable monthly in arrears, and mature on 30 November 2028.
The convertible notes, referred to as CAM Notes, provide investors with the option to convert their notes into fully paid ordinary shares of Clime Capital on a one-for-one basis. This hybrid structure offers a blend of fixed income and potential equity upside, appealing to investors seeking steady income with exposure to the company’s underlying portfolio.
Offer Structure and Eligibility
The offer is divided into two components, a Priority Offer and a Broker Firm Offer. The Priority Offer is available to eligible persons with a registered address in Australia or New Zealand who are current or past shareholders or noteholders of CAM, or others deemed eligible by the Board. The Broker Firm Offer targets clients of the lead manager, Ord Minnett Limited, and participating brokers.
Applications under the Priority Offer must be made online with a minimum subscription of 2,000 notes ($2,000), while the Broker Firm Offer requires applicants to apply through their brokers. The offer is scheduled to close on 25 August 2025, with CAM Notes expected to commence trading on the ASX under the code CAMG from 9 September 2025.
Use of Proceeds and Capital Structure Impact
Funds raised from the offer will primarily be used to redeem existing notes and to finance further investments consistent with CAM’s established strategy of investing in quality Australian securities. The company’s pro forma balance sheet indicates an increase in cash reserves post-offer, enhancing liquidity and investment capacity.
The capital structure post-offer will depend on existing noteholders’ decisions to redeem, convert, or roll over their current notes. Illustrative scenarios suggest the total number of CAM Notes on issue will be capped at 35 million, with ordinary shares potentially increasing through conversions.
Risks and Considerations
Investors should be aware that CAM Notes are complex instruments with risks including market price volatility, liquidity constraints, redemption risk, and reliance on the investment manager’s performance. Interest payments, while fixed, depend on CAM’s ability to generate sufficient cash flow from its portfolio. The notes are unsecured and rank behind secured creditors in a winding-up scenario.
Noteholders do not have voting rights until conversion to shares, and the market price of both notes and shares may fluctuate. The company advises prospective investors to seek professional advice to understand the suitability and tax implications of investing in CAM Notes.
Management and Governance
Clime Capital’s portfolio is managed by Clime Asset Management Pty Limited, a subsidiary of ASX-listed Clime Investment Management Limited. The board comprises experienced directors including Chairman John Abernethy. The investment philosophy emphasizes quality companies with strong financials and sustainable growth potential.
The offer is not conditional on shareholder approval and is not expected to affect the company’s control or management structure.
Bottom Line?
As Clime Capital embarks on this $14 million convertible note raise, investors will be watching closely to see how the market receives the notes and how effectively the company deploys the proceeds to sustain income and growth.
Questions in the middle?
- How will existing noteholders decide between redemption, conversion, or rollover before the offer closes?
- What level of liquidity and trading activity can investors expect for CAM Notes once listed on ASX?
- How will fluctuations in market conditions and interest rates impact the attractiveness and pricing of the CAM Notes?