Locke Lord Advises Jade Road Investments Limited on Restructuring of Business and All Assets and Liabilities

Locke Lord’s Sean Page (London) advised Jade Road Investments Limited, an AIM quoted investing company (Jade Road), on the transfer of its existing interests in certain legacy assets in its portfolio (Legacy Assets) to Eastern Champion Limited (Eastern), a previously wholly owned subsidiary of Jade Road and the novation of Jade Road’s $3.62 million fixed rate secured loan notes to Eastern.

To effect the transfer of the Legacy Assets, Jade Road required both shareholder and noteholder approval, as well as a release from the security granted by Jade Road to the security trustee in favour of the noteholders. The transfer was also subject to a number of conditions, including among others the novation of the existing Jade Road loan notes, the entry into a working capital loan agreement between Jade Road and Eastern, and a new investment management agreement in respect of the management of the Legacy Assets by Harmony Global Partners Limited on Eastern’s behalf.

To novate the loan notes to Eastern, Jade Road required the consent of all noteholders and contemporaneously entered into a series of releases provided by the security trustee. At the same time, Eastern issued a new loan note instrument and entered into a series of security documents on almost identical terms to the corresponding debt structure in Jade Road.

The consideration for the Legacy Assets was settled by Eastern issuing shares on a pro rata basis to Jade Road's shareholders through an in-specie dividend, resulting in Eastern and Jade Road having the same shareholders on the completion date. Jade Road also entered into a new advisory services agreement for the management of its business moving forward with Heirloom Investment Management, LLC.

As a result of the above transactions, Jade Road is now a cash shell looking to acquire a business via a reverse takeover.
Posted on June 6, 2024