They use a range of investment vehicles, including fixed income and alternative investments.<\/p>\n\n\n\n
Orange River Wealth through its special purpose vehicle Orange River Capital owns 49% of medicinal cannabis cultivation facility Greengrow located in El Passo Farm in South Africa. Orange River aims to amp the facility\u2019s operations to increase production and acquisitions in the European cannabis market. The firm targets revenue of 26 million US dollars in three years.<\/p>\n\n\n\n
Having said that, the company is offering a convertible loan note due 2025 and preferential shares in three series.<\/p>\n\n\n\n
![\"convertible](\"https:\/\/adamfayed.com\/wp-content\/uploads\/2023\/03\/image-31.png\")
Si te han propuesto esta opci\u00f3n y quieres una segunda opini\u00f3n, puedes enviarme un correo electr\u00f3nico (advice@adamfayed.com) o p\u00f3ngase en contacto conmigo aqu\u00ed.<\/a><\/p>\n\n\n\n A veces podemos ofrecerle descuentos, y otras ventajas, si desea invertir en \u00e9l, en comparaci\u00f3n con muchos otros proveedores, o presentarle alternativas que podr\u00edan ser mejores para su situaci\u00f3n.<\/p>\n\n\n\n Ultimately, investing into loan notes always carries big risks, and you could lose all your money. It makes sense to seek guidance or advice.<\/p>\n\n\n\n La informaci\u00f3n contenida en este art\u00edculo es meramente orientativa. No constituye asesoramiento financiero, jur\u00eddico o fiscal, ni una recomendaci\u00f3n o solicitud de inversi\u00f3n. Algunos hechos pueden haber cambiado desde el momento de su redacci\u00f3n.<\/p>\n\n\n\n <\/p>\n\n\n\n A convertible loan note is a financial instrument that blends the characteristics of both a loan and an equity investment. Essentially, it is a type of debt security that can be converted into equity at a later point in time, typically during a future financing round or upon meeting specific conditions.<\/p>\n\n\n\n When an investor purchases a convertible loan note, they are essentially loaning funds to a company, with the option to convert that loan into equity at a later stage. This conversion usually happens at a discounted rate to the company’s valuation during the future financing round, which incentivizes the investor to convert the loan into equity.<\/p>\n\n\n\n A convertible loan notes isoften used by startups and early stage companies as a flexible and less dilutive method of raising funds, as it doesn’t require an immediate valuation of the company and doesn’t lead to the issuance of new shares at the time of investment.<\/p>\n\n\n\n The convertible loan note bears a yearly interest rate of 10.25% for investments that are denominated in euros, 10.75% for those in British pounds, and 11.25% for those in US dollars.<\/p>\n\n\n\n The coupon is paid out on a quarterly basis, specifically every April, July, October, and January every year through 2025.<\/p>\n\n\n\n This security can be converted into series B USD shares at 0.32 USD per share.<\/p>\n\n\n\n Preferential shares, also known as preferred stock, are a type of equity security that typically carry preferential treatment in terms of dividends and liquidation preferences over common stock. Unlike common stock, which represents ownership in a company and typically comes with voting rights, preferential shares give investors priority in receiving dividends and liquidation proceeds.<\/p>\n\n\n\n In general, preferential shares have a fixed dividend rate or a formula to calculate dividend payments, which may be higher than the dividend paid on common stock. Additionally, in the event of a liquidation or sale of the company, preferential shareholders are typically entitled to receive their investment back before common shareholders.<\/p>\n\n\n\n Preferential shares are often used by companies that want to raise capital but don’t want to dilute the ownership and control of existing shareholders. They can also be attractive to investors who want the potential for higher returns than common stock but don’t want the same level of risk associated with investing in a company’s debt.<\/p>\n\n\n\n The preferential shares in Orange River Wealth unit Orange River Capital are being sold in a private placement at 0.25 USD per share. Interested investors are required to spend at least 25,000 USD to participate in the offering. <\/p>\n\n\n\n The investment pays a fixed annual dividend of 15% from the additional Greengrow cannabis facility\u2019s first year of production. This dividend interest is paid out twice a year. There is an extra 5% bonus that\u2019s tied to earnings from the second year of operation of the said facility.<\/p>\n\n\n\n Orange River Wealth expects to raise up to 8 million USD from investors\u2019 subscription of preferential shares in this second funding round. The private placement is part of a larger offering that seeks to raise 24 million USD. Currently, the company\u2019s series A shares placement has been fully subscribed and generated 6 million USD in proceeds.<\/p>\n\n\n\n Orange River Wealth intends to hold a series C private placement of preferential shares under the said larger deal. The company eyes 10 million USD for such offering.<\/p>\n\n\n\n Individual investors who possess an income of at least 100,000 pounds per year are considered high net worth individuals and are qualified to subscribe to join the private placement. The annual income excludes any amount obtained from pension accounts.<\/p>\n\n\n\n These individuals must also have net assets worth 250,000 pounds, minimum, excluding primary residence, insurance, or pension savings.<\/p>\n\n\n\n To be considered under this category, an individual must have been one of the following:<\/p>\n\n\n\n <\/p>\n\n\n\n The share capital or net assets must be 500,000 pounds if comprised of over 20 corporate members; 5 million otherwise. The net assets for unincorporated associations or partnerships must be at least 5 million pounds as well. For trusts, the cash and investments must total at least 10 million pounds.<\/p>\n\n\n\n How to subscribe to the private placement?<\/p>\n\n\n\n <\/p>\n\n\n\n Cannabis is considered an emerging market because it is a relatively new and rapidly growing industry that is gaining acceptance and legalization in many countries around the world. In fact, cannabis is a lucrative cash crop, with a value that is more than 75 times greater than that of grapes and 150 times greater than that of sugar cane.<\/p>\n\n\n\n Investing in cannabis as an emerging market can potentially offer attractive opportunities for investors due to its solid upside potential.<\/p>\n\n\n\n Orange River Capital is expected to be valued at more than 150 million USD after its buildout plans are completed. A convertible loan note can be an attractive investment option for investors who want to support the growth of a company but are not yet ready to invest in equity.<\/p>\n\n\n\n South Africa is an attractive export market for cannabis due to a combination of factors, including its favorable climate for cannabis cultivation, its strategic location for export to other African countries, and the growing demand for cannabis products both domestically and internationally. Besides, production costs are cheap.<\/p>\n\n\n\n Since the preferential shares offer a fixed dividend rate, they can offer investors the potential for higher returns than traditional fixed-income investments, such as bonds. The fixed dividend payment provides a degree of protection against inflation. Additionally, in the event of a liquidation or sale of the company, preferential shareholders are entitled to receive their investment back before common shareholders, which can provide an added layer of protection for the investors.<\/p>\n\n\n\n The conversion price of the loan note is often determined at the time of conversion, which can create uncertainty for investors about the valuation of the company at that time. This could lead to limited returns.<\/p>\n\n\n\n Preferential shares are often sensitive to changes in interest rates. If interest rates rise, the dividend rate on the shares may no longer be attractive compared to other fixed-income investments, which can cause the value of the shares to decline.<\/p>\n\n\n\n If Orange River Wealth experiences financial difficulties, there is a risk that it may not be able to meet its dividend obligations to the preferential shareholders, or that the shares may lose value or become worthless.<\/p>\n\n\n\n Preferential shares may not be as liquid as other investments, such as stocks, which can make it difficult to sell them in a timely manner, particularly in volatile market conditions.<\/p>\n\n\n\n The value of preferential shares may be influenced by broader market conditions, such as changes in the economy, geopolitical events, or regulatory changes, which can cause the value of the shares to decline.<\/p>\n\n\n\n While preferential shares can provide some protection against inflation, there is still a risk that the rate of inflation may outpace the dividend rate, which can erode the real value of the investment over time. It’s important for investors to carefully evaluate the risks and potential rewards associated with convertible loan note and preferential shares, and to diversify their investments to manage risk.<\/p>\n\n\n\n \u00bfLe duele la indecisi\u00f3n financiera? <\/strong><\/p>\n\n\n\nWhat is a convertible loan note?<\/strong><\/h2>\n\n\n\n
What are the terms of Orange River Wealth\u2019s convertible loan note offering?<\/h3>\n\n\n\n
What are preferential shares?<\/strong><\/h2>\n\n\n\n
What are the terms of Orange River Wealth\u2019s preferential B shares offering?<\/h3>\n\n\n\n
Who are eligible to subscribe to the preferential shares B?<\/strong><\/h2>\n\n\n\n
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High Net Worth Individuals<\/h3>\n\n\n\n
Sophisticated Investors<\/h3>\n\n\n\n
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Companies, Unincorporates Association, or Trust<\/h3>\n\n\n\n
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What are the pros and cons of investing in Orange River Wealth convertible loan note and preferential shares B?<\/strong><\/h2>\n\n\n\n
Pros<\/h3>\n\n\n\n
Developing economy<\/h4>\n\n\n\n
Attractive valuation prospects<\/h4>\n\n\n\n
Advantageous export market site<\/h4>\n\n\n\n
Cobertura de la inflaci\u00f3n<\/h4>\n\n\n\n
Contras<\/h3>\n\n\n\n
Uncertainty of valuation<\/h4>\n\n\n\n
Riesgo de tipo de inter\u00e9s<\/h4>\n\n\n\n
Credit risk<\/h4>\n\n\n\n
Riesgo de liquidez<\/h4>\n\n\n\n
Riesgo de mercado<\/h4>\n\n\n\n
Riesgo de inflaci\u00f3n<\/h4>\n\n\n\n
Compare it with the Utmost International Quilter Collective Investment Bond<\/a>.<\/p>\n\n\n\nConclusi\u00f3n<\/strong><\/h2>\n\n\n\n
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