IN BRIEF: Tern says it can no longer meet capital calls by Sure Valley
Tern PLC - internet-of-things focused investor - Determines that it has insufficient funds to meet capital calls by Sure Valley Ventures Enterprise Capital Fund LP. Says it has exhausted what it considers to be "all reasonable mitigation measures, including salary reductions, open offer fundraising, shareholder engagement, and collaborative effort with SVV2 to identify a replacement investor". In June, shareholders rejected a resolution to give Tern directors authority to disapply pre‑emption rights when allotting shares for cash. Then, an open offer to shareholders in October for up to GBP642,486 only delivered proceeds of GBP151,136. As a result, Tern has requested relief from its funding obligations to SVV2 and will be classified as a defaulting investor. Remedies available under the limited partnership agreement include forfeiture of existing capital or the compulsory transfer of Tern's interest in SVV2. If Tern's existing paid‑in capital is not required to be forfeited, and no other SVV2 Ltd partner elects to assume Tern's commitment, Tern's paid‑in capital will remain invested within SVV2 until the cessation of the fund, at which point any residual value will be returned in accordance with the LPA, "although defaulting investor status may reduce Tern's rights to distributions during the life of the fund and could limit Tern's recovery compared to non-defaulting investors," company notes. Read More