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Combination of recently announced bought deal equity financing and early conversion of convertible debentures, will strengthen its balance sheet and increase cash flow
TORONTO, Jan. 22, 2021 (GLOBE NEWSWIRE) — Enthusiast Gaming Holdings Inc. (“Enthusiast Gaming” or the “Company”) (TSX: EGLX)(OTCQB: ENGMF)(FSE: 2AV), the largest gaming platform in North America, reaching over 300 million monthly video game and esports fans worldwide, announced that it has issued notice to the holders, of the Company’s convertible debentures (the “Debentures”) to exercise the Company’s option to convert the outstanding Debentures into common shares of the Company (the “Common Shares”). The Debentures were set to mature on December 31, 2021. Upon completion of the conversions, $9 million in principal amount of the Debentures will have been converted into approximately 2,967,163 Common Shares.
As the Company had previously announced, it has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to sell (the “Offering”), on a bought deal basis, up to 7,383,000 Common Shares to be issued by treasury for total gross proceeds to the Company of approximately $42.5 million (assuming exercise in full of the over-allotment option). In connection with the Offering, a selling shareholder will sell an additional 2,817,500 Common Shares (assuming exercise of the over-allotment option).
By reducing the Company’s indebtedness through the conversion of the Debentures and by raising $42.5 million upon the successful completion of the bought deal financing, the Company will have strengthened its balance sheet by more than $50 million, while reducing annual interest costs by $0.8 million.
“This week we took a major step to add a sizeable amount of growth capital, while also significantly reducing our borrowings and interest costs,” commented Adrian Montgomery, CEO of Enthusiast Gaming. “These two actions will strengthen our balance sheet ahead of our proposed Nasdaq listing, while we push forward with the execution of our growth strategy, which includes acquiring accretive properties which we can integrate into our platform.”
About Enthusiast Gaming
Enthusiast Gaming (TSX: EGLX)(OTCQB: ENGMF)(FSE: 2AV) is building the world’s largest social network of communities for gamers and esports fans that reaches over 300 million gaming enthusiasts on a monthly basis. Already the largest gaming platform in North America and the United Kingdom, the Company’s business is comprised of four main pillars: Esports, Content, Talent and Entertainment. Enthusiast Gaming’s esports division, Luminosity Gaming, is a…
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