Ambulance chasers get away as JustKapital fails to raise enough cash
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Lawsuit funder JustKapital is calling it quits on a company-transforming US deal after three months of trying to whip lenders into shape.
JustKapital (ASX:JKL) tried to buy 70 per cent of US ambulance chaser investor National Health Finance (NHF) in September.
But on Monday they raised the white flag, saying they had been unable to secure enough funding.
The debt and equity-funded $US68 million ($85 million) deal was conditional on JustKapital securing a new debt facility, shareholder approval and a successful equity raising.
JustKapital came out of a two-week trading halt with the news. The shares closed Monday steady at 9.8c, valuing the company at $14.1 million.
JustKapital managed to get a $4.4 million private placement with institutions away in November, and by the end of September had lifted its credit line with AssetSecure to $35 million.
At the end of the 2017 financial year, the company was carrying just under $40 million in short term and long term debt, on revenue of $22.4 million.
On October 31 NHF founders David Wattel and Mark Siegel agreed to reduce the sale price to $US61.8 million.
At the same time, chairman and managing director Philip Kapp resigned to focus on managing a restructured litigation portfolio, of which he retained all the management rights.
Mr Kapp, along with the rest of the board, took a pay cut from $775,000 to $500,000 after shareholders questioned the wisdom of paying its directors such high fees.