BRANTFORD, Ont. - Liquidation World Inc. (TSX:LQW) says it has closed $2 million in private-placement financing with two investment firms run by its own board members.
The Ontario-based liquidator said Friday that both Talon Mezzanine Partners LLC and Oakwest Corporation Ltd. are involved in the financing.
Talon is managed by Liquidation’s chairman William Wolf, while company director Eric Beutel is an officer at Oakwest.
Each firm will receive $1 million of secured non-convertible subordinated notes of Liquidation World, as well as five-year purchase warrants exercisable into 791,614 common shares of the company at 66 cents per share.
"The completion of the financing comes at an important juncture for the company and should provide (us) with fresh capital to assist the company in purchasing new inventory to fill our stores," said Jeffrey Mandel, chairman of the Liquidation World’s special committee.
"By having two of our existing shareholders provide the money for the financing, we were able to complete the financing in a short time period in a cost-effective manner."
Liquidation World sells consumer merchandise obtained from bankruptcies and other inventory liquidations through 96 stores in Canada and one in the U.S.
The company employs more than 1,500 employees, making it Canada’s largest liquidator.
In recent quarters it has struggled to turn a profit and has closed some of its stores.
Shares in Liquidation World fell one cent to 76 cents in afternoon trading on the Toronto Stock Exchange.
