Octopus Investments, a UK alternative investment specialist, has announced the provision of GBP2.65m of flexible debt refinancing to CSL Dualcom, a supplier of dual signalling alarm sys
Octopus Investments, a UK alternative investment specialist, has announced the provision of GBP2.65m of flexible debt refinancing to CSL Dualcom, a supplier of dual signalling alarm systems, following the collapse of the company’s bank, Kaupthing Singer & Friedlander.
The five-year, interest-only flexible loan provided by Octopus as part of its Breathing Space product for UK small and medium-sized enterprises, is intended to increase CSL’s access to the capital required to continue with business expansion and product development.
Octopus has allocated GBP40m of existing funds raised through its lower-risk venture capital trusts to the Breathing Space product. It is actively looking to support UK SMEs by increasing access to funding, following the rapid withdrawal of financing from traditional providers such as banks.
‘Breathing Space allows high-calibre companies, like CSL, to secure five-year, non-amortising, flexible funding, at an interest rate that is competitive in the market and, in particular, at a low level in the first two years of the loan,’ Octopus says.
Typically, companies that qualify for ‘Breathing Space’ have the following characteristics: robust business models, established management teams, strong recurring cash flows, historic annual sales greater than GBP7m and Ebitda greater than GBP750,000.
‘As a stable, high-growth business operating in a non-cyclical sector, CSL is exactly the sort of company we are seeking to support with our Breathing Space product,’ says Octopus director Stuart Nicol.
‘With over GBP40m raised in order to provide similar financing solutions to secure and profitable SMEs, Octopus is fully committed to supporting UK enterprise. For our investors, the provision of interest-only loans to companies like CSL offers a low risk investment opportunity which, when combined with the various tax incentives associated with VCT investment, makes the potential for returns extremely compelling.’
CSL finance director David Doble says: ‘Octopus has provided CSL with a high degree of certainty during the ongoing economic turbulence. Unlike traditional high street lenders, Octopus showed a willingness to both understand our business and also lend to us. The terms of their interest-only loan are both competitive and extremely flexible, providing us with a unique financing solution for future business expansion and product development.
‘Octopus backed our MBO in 2006 and their private equity team proved to be an excellent partner for us. We firmly believe that the type of funding now available through the Breathing Space product make them ideal financial providers for companies like CSL.’