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Here is the latest. DONʼT FORWARD THIS ONE. If you want to share this information with someone let me know so we can agree on what version can be shared. The PEGG stuff is particularly sensitive.
PEGG and I have spent a lot of time on PEGG Board calls and with the lawyers and some calls with bankers trying to understand all the issues behind the various delays. My opinion is that the original transaction between Consolidated and PEGG based on accessing bank debt by leveraging MTNs with Chinese pension fund investors is dead. The new business created by PEGG Director David Daniel and Consolidated Director Paul Van Wyk, PECL, has three lines of business. The “bullet” trades that they were seeking to promote and sell never came to fruition and every time the money was promised to be wired to them or settled something went wrong. The business of brokering bank guarantees between high net worths and companies is proceeding and they have done some small deals but not enough to complete their investment in GPEH. They appear to have quite a few more lined up mostly working with HSBC and these seem to be coming to fruition to provide them with a steady cashflow but not much excess investment capital. The mandate from the Chinese pension funds to buy MTNs from European issuers remains the best and original opportunity. There have been many problems with the requirements around the provenance of the money, the chaos around the Euro and PECLʼs own actions where they sought to leverage the MTNs on their own account which would have provided huge upside but was too complicated to transact and nearly killed the Chinese mandate. That has now been resolved and it appears the first trade has actually occurred and their first commission of circa $65MM is due to be paid shortly from which they will compete their $5.5mm investment in GPEH Series A.
Obviously given the history we canʼt rely on it till itʼs in the bank. If it does come through then we can expect the full $5.5mm immediately as an advance from PECL which will then be rolled into PEGG when PECL gains control of that vehicle. There will also be a $10-$20mm advance into Asia BrandTech to grow to $100mm as they complete further transactions.
MILLENNIUM is finally more engaged in the process. They have solved the issue they were having with their first close. They previously got Investment Committee approval for the investment in us and on this Friday 6th they will seek approval to disburse funds to us. We have a conference call tomorrow with them and their lawyers to get shipshape legally ahead of their Friday meeting. They want to invest $12mm so as to roll-in the $2mm investment in Bonfireʼs planned Africa investment bank. I will provided them with a confidential update tomorrow and copy yʼall. I am hopeful we can close fairly quickly now and then focus on negotiating their $50mm into Asia BrandTech.
Re: Fwd: HIGHLY CONFIDENTIAL Gramercy Financial
SEVEN HILLS remains targeted on a Jan 16th close provided that we have paper from Millennium or funds from PEGG. They will then close on their $10mm into the Series A. Their appetite for Asia BrandTech remains circa $70mm+
ANGAD PAUL commitment of $5mm into Series A (on top of the transfer of $10mm of OA stock) remains
contingent on his selling down his position in Mytrah Energy to fund this. The shares remain locked up till
March.
Angadʼs investment depending on the cost of such a loan. Obviously Angadʼs preparedness sot pledge
the stock carries a lot of wait as proof of his commitment to the company and we should be able to leverage his position in Mytrah.
I am continuing to seek a bridge from Dave Katragadda based on us reducing the pressure on him around Quartics bridging by helping to close an investor Bob Dahl. I have also asked that if Dahl closes we get paid the Jan and Feb advisory fees for GVA, a total of $50, 000.
DMS sale returns of circa $50K look set to come in mid-January
I have diverted some of my time to chasing fresh advisory work that is not GPE investment related and have two good opportunism in both cases helping well established companies in Australia do deals with US companies. SMS with IBM and AAPT with Facebook. I am seeking $50K upfront in each case and total fees of $300-$400K. I hope for a mid-Jan close.
Michael Gale
Managing Partner
Gramercy Private Equity, LLC.
[protected]@gramercype.com
www.gramercype.com
548 Market Street, #27695
San Francisco, CA 94104
+1.415.543.3000 phone
+1.415.449.3568 fax
+1.415.378.7364 cell
Skype: michaeljgale
