Benefits of an Equity Credit Line
Flexibility
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The Equity line of Credit
does not require positive research, an investment case, or an active marketing effort by management and a sales force.
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It can be executed in
virtually all market conditions.
Speed
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Once the line has registered,
Seller can start raising new equity the day Seller asks us to do so.
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Proceeds would be received
within four weeks.
Control
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Seller retains control over the timing and the price at which new equity is raised.
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Seller can ask Investor
to buy shares at any time, regardless of market conditions. In other words, Seller has
a put option on the Investor.
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Seller can set a minimum threshold.
Security
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Seller is not committed to sell any shares. Investor remains committed for the full period.
Market Timing
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Once the Equity Line
is in place, Seller is in a position to take advantage of periods of price strength
by immediately executing a draw down, instead of risking that the favourable market window has shut by the time a secondary
offering has been organized.