SME Financing – Apricity

Apricity Finance Group (‘Apricity’) was established in 2013. Bowral-based Apricity offered an invoice financing product under which it would lend up to 95 per cent of the value of approved invoices to business borrowers. Like many participants in the private debt space, Apricity ultimately pursued an omni distribution channel with respect to raising investor capital. In this case, a direct channel to wholesale / high net worth investors by way of a note structure and subsequently through a warehouse financing agreement with GCI Commercial Finance Fund (GCI). The latter was provided through a special purpose vehicle known as Apricity Transasia Finance Pty Ltd (‘ATF’). ATF is a wholly owned subsidiary of Apricity who acted as the manager of the GCI funded loan book. As per all warehouse structures, GCI obtained a General Security Interest against both ATF and Apricity for the funds advanced.

On 27 March 2023 GCI appointed Alan Hayes and Wayne Marshall of Hayes Advisory as Receivers & Managers of ATF, following a default under the company’s facility agreement. It is understood that GCI ceased ongoing funding to ATF. Subsequent to the appointment of the Receivers & Manager to ATF, the Director of Apricity (Andrew Meakin) sought to conduct a detailed inspection of Apricity’s records. It was discovered that Apricity owed significant amounts to loan note holders in excess of $48 million. As a result, the Director procured the resignation from fellow director (Linden Toll) and sought to immediately appointment a Voluntary Administrator. with Apricity following it into administration in April 2023. Apricity Finance Group has five shareholders, including Bowral-based Shartru Capital which owns about 86 per cent of its shares. Mr Meakin and Mr Toll are both directors of Shartru Capital and each own one of its two shares.

Recently on 23 September 2023, the liquidator Darren Vardy from Insolvency Options told all noteholders ($50m worth) to entirely write-off their investments. The largest noteholder, Peter Guy and one of the original directors of Jana Investment Advisers back in 1987, burnt $14.5 million. Investors through GCI have / are expected to be made entirely whole, or very materially so. It is believed Linden Toll has fled overseas and remains uncontactable.

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